M&M In Advanced Talks To Acquire Sumitomo’s Complete Stake In SML Isuzu: Report

The potential acquisition would facilitate M&M’s entry into the trucks and buses sector, expanding its footprint beyond passenger and light commercial vehicles.

The report suggested that M&M’s board was likely to meet within the week to review the acquisition proposal.

Source : Mahindra

Mahindra & Mahindra (M&M) is reportedly all set to purchase the complete stake owned by Japan's Sumitomo Corporation in SML Isuzu. The automaker is in the final stages of talks with the Japanese firm to acquire the stake in Isuzu, an Indian commercial vehicle manufacturer, reported CNBC-Awaaz.

The potential acquisition would facilitate M&M’s entry into the trucks and buses sector, expanding its footprint beyond passenger and light commercial vehicles. Citing sources, the report said that M&M was assessing a share price range of Rs 1,400–1,500 for SML Isuzu in the proposed deal.

Following the news, SML Isuzu shares surged 7.9 per cent intraday, reaching a high of Rs 1,785.80. By the end of the trading session, the company's shares settled at Rs 1726.40 apiece, clocking a gain of 4.36 per cent. The firm commanded a market capitalisation of Rs 2,498.38 crore, while its 52-week high stood at Rs 2,406.00, and the low touched Rs 1,030.90.

Financial Performance and Ownership Structure

The report suggested that M&M’s board was likely to meet within the week to review the acquisition proposal. As of December 2024, Sumitomo Corporation owns a 43.96 per cent stake in SML Isuzu, according to stock exchange data. Japan’s Isuzu Motors, known for its SUVs and pickup trucks, retains a 15 per cent stake in the company through a separate entity.

SML Isuzu has been experiencing financial strain, with net profit plummeting 80.22 per cent to Rs 0.53 crore in the quarter ending December 2024, down from Rs 2.68 crore a year earlier. Sales also declined 14.07 per cent year-on-year, reaching Rs 331.80 crore compared to Rs 386.13 crore.

Meanwhile, M&M shares closed trading on Monday at Rs 2,775.50 apiece, inching 0.85 per cent lower. 

Previous Acquisition Reports and Industry Impact

This was not the first time a potential acquisition involving SML Isuzu came out in the news. In June 2023, CNBC-TV18 reported that JBM Auto was among the leading contenders to acquire the company, as Sumitomo Corporation sought to exit its India operations.

If the deal materialises, M&M’s entry into the heavy vehicle segment could heighten competition in India’s commercial vehicle market, which is currently led by Tata Motors and Ashok Leyland.