Mahindra To Buy 51% Stake In Peugeot Motorcycle

In order to grow its two-wheeler business, Mahindra Two Wheelers (a part of $16.5-billion Mahindra Group) has entered into a binding bid of Rs 216 crore to acquire 51% stake in Peugeot Motorcycles. This was announced yesterday after negotiations for several months.

Pawan Goenka, executive director, Automotive business at M&M said that the legal formalities will be done in three months, following which, the new board will have three nominees from Mahindra Two Wheelers and two from the PSA Group.

Goenka said that Peugeot is a “good fit” to Mahindra Two Wheelers. "It is a strong brand, which can sit above Mahindra Scooters. The four areas M&M-Peugeot will work on are building the brand - expedite global expansion, investing in product portfolio and bring together synergies in sourcing and selling," he said.

"We can work together in helping them grow in emerging markets like India, and Africa. We are infusing money so they will have enough headroom to develop new products. They have a very strong technology centre with over 20% of its workforce dedicated for R&D with good styling team, which can have a strong rub-off effect on M&M," he added.

Peugeot is the fifth largest two-wheeler maker in Europe with a market share of 9% and annual volume of 79,000 units.