Utility vehicle maker Mahindra & Mahindra on Tuesday said it has completed the purchase of Navistar International Corp's stakes in the medium & heavy trucks and engines joint ventures.
Navistar announced in Dec its intention to exit the joint ventures as part of its turnaround strategy, which is focused on strengthening its North American core businesses and pursuing near-term initiatives to improve the company's return on invested capital performance.
M&M had said it would acquire Navistar International Corp's 49 percent stake in Mahindra Navistar Automotives (MNAL) and Mahindra Navistar Engines (MNEPL) for about Rs 175 crore. The two companies had entered into a truck and bus manufacturing JV in 2005, while the engines JV was formed in 2007.
"Mahindra remains committed to growing its presence in the Indian commercial vehicle industry with Mahindra's truck and engine businesses continuing to play a critical role in helping us achieve this goal," said Dr Pawan Goenka, president, automotive and farm equipment sectors.
As per the deal, Navistar can continue sourcing components from India while M&M would continue to provide engineering services to the US firm. The Navistar group will also continue to support M&M through license agreements and extend necessary support to MNAL and MNEPL for the purposes of business continuity.
M&M on Friday said standalone net profit for the third quarter rose 26 percent from a year ago to Rs 836 crore. Net sales for the three month period rose 29 percent year-on-year to Rs 10,643 crore.
M&M shares closed at Rs 884.50 on NSE on Tuesday, up 0.2 percent.
Also Read: Mahindra to acquire BAE Systems' 26% stake in defence JV
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