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29.11.10's Mahindra & Mahindra has signed a deal with Ssangyong Motor to acquire the struggling South Korean automaker for $463 million in shares and debt in a bid to create a global force in sport utility vehicles.
Ssangyong, which mostly manufactures SUVs and also makes a luxury sedan, the Chairman, went into court-approved bankruptcy protection early last year amid falling sales, mounting red ink and a history of labor strife.
The South Korean company was once majority-owned by SAIC Motor Corp. until the Chinese company lost management control during the bankruptcy process. & Mahindra Ltd., which also makes SUVs, and Ssangyong Motor Co. announced in a statement Tuesday that they signed an acquisition agreement for the Indian company to take a 70 percent stake.
Of the acquisition price, $378 million is in new shares and $85 million is in corporate bonds, they said.
The deal came after India's Mahindra was named the preferred bidder for Ssangyong in August. The companies said they expect the deal to be completed in March 2011 after required creditor and court approval of a revised corporate revival plan.
Ssangyong will remain as an independent entity with mostly Korean management with Mahindra "committed to nurturing the Ssangyong brand in global markets," the statement said.
"The inherent strengths of Ssangyong combined with Mahindra's expertise will help in building a global SUV major," they said.
Ssangyong filed for court receivership in January last year. It endured a 77-day occupation of part of its production line by hundreds of workers let go under a plan meant to help the automaker stop its losses.
The companies also said that an agreement was signed by the Ssangyong labor union and the two companies covering "employment protection, long-term investment and commitment for no labor dispute," the statement said.


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