While speculations have been rife for the last few days, Mahindra Two-Wheelers has, in an official communication, announced that the company is set to acquire a 51 per cent majority stake in Peugeot Motorcycles.
The two-wheeler division of Peugeot has so far been a part of the 54 million Euro PSA Group. Peugeot Scooters, which was established 116 years back, is the world’s oldest motorized two-wheeler manufacturer. The company sells scooters and mopeds with an engine displacement ranging from as low as 50cc to as high as 400cc, also the controversial yet successful three-wheeled scooter, Metropolis.
The deal will now see a Works Council Consultation as a part of employee dialogue process and European anti-trust laws will see Mahindra pumping in 15 million Euros into Peugeot’s loss making two-wheeler arm to fund projects started by the Mahindra two-wheelers and Peugeot two-wheelers in the future. The deal would go ahead by sale of sales by the PSA Group to Mahindra till the share hold of the Indian manufacturer reaches 51 per cent.
The top management of Mahindra Two-Wheelers believe that this new partnership would further help both the parties in their aim to expand in the global market. Mahindra will offer access to the highly lucrative Indian two-wheeler market, technology to deal with the mass markets such as ours (we all know niche products cannot do too well in our country), and also look after the marketing strategy. Peugeot on the other hand will be bringing in its European DNA with its products which have already won a lot of hearts the world over.
Peugeot will also get access to markets like Latin America and Africa thanks to the Mahindra manufacturing plants in these areas, allowing them to cater to a wider range of market audience.
Mahindra’s four-wheeler arm is also reportedly trying to carve out a collaboration with the Citroen and Peugeot and their products have been spied together when they have been out for testing, at least a couple of times…
Great thing this then..! Mahindra joins Bajaj, Hero in the acquisition spree!