Mahindra closes Ssangyong Deal

Mahindra & Mahindra, has finally closed the deal to buy ailing Korean automaker Ssangyong. Mahindra will pay Rs 2,105 crore ($463 million) to acquire a controlling stake.

A total of 70 percent stake will be acquired by Mahindra by buying new shares in the deal. The deal needs approval from Ssangyong Creditors. Mahindra also will buy 95.4 billion won of new bonds from Pyeongtaek, South Korea-based Ssangyong. Mahindra was selected as a preferred bidder in August this year.

Ssangyong will still continue to function as an independent entity. The company will retain the current management to help it understand the local market while taking few executives from M&M, who will work with the Korean management in key operational areas.

The final agreement for the deal has been filed at the Seoul Central District Court, which is overseeing Ssangyong’s restructuring. The main entities arranging the sale are Samjong KPMG Advisory Inc. and Macquarie Group Ltd.

According to Mahindra, the acquisition process will completed by March 2011.