Tata Motors to acquire Marcopolo's 49% stake in bus venture for Rs. 100 crore
- IBEF
- December 18, 2020
On Thursday, Tata Motors stated that it would purchase the 49% interest in all cash deal held by its Brazilian partner Marcopolo in its bus-making joint venture Tata Marcopolo Motors Ltd (TMML) for Rs. 100 crore (US$ 13.59 million). TMML would become a wholly owned subsidiary of Tata Motors following the takeover, the automotive major stated in a regulatory filing.
Tata Marcopolo Motors is a 51:49 JV founded in 2006 between Tata Motors and Marcopolo S.A., one of the largest manufacturers of buses and coaches, based in Brazil.
Tata Motors said in a BSE filing, "The company and Marcopolo S.A. have signed a share purchase agreement where the Company will purchase the balance 49% shareholding in TMML for a cash consideration of Rs. 99.96 crore (US$ 13.59 million)".
Tata Motors would acquire 8.33 crore shares Rs. 10 (US$ 0.14) each, representing 49% of Tata Marcopolo Motors Ltd.’s paid up equity capital from JV partner Marcopolo S.A for Rs. 99.96 crore (US$ 13.59 million).
The planned acquisition is expected to be completed by February 28, 2021.
After a prosperous venture in India, Marcopolo S.A chose to leave the JV and offered to sell its 49% shareholding in the JV to the company as a result of its refreshed market strategy.
Further, as part of the transition, Marcopolo S.A. would continue to license the "Marcopolo" trademarks to TMML for a minimum of three years with a non-compete provision in India for a corresponding period.
The transaction will not have any effect on the activities of TMML or the ongoing sales and operation of the clients of the Firm. The corporation, Marcopolo S.A. and TMML aims to establish an open forum for potential prospects for collaboration on bus model designs and technical consultancy services.
Tata Marcopolo Motors was one of the first companies to introduce low-floor passenger buses for public transportation in cities like Delhi, Mumbai, etc. The company has its manufacturing facilities in Dharwad and Lucknow where it manufactures bus bodies. The bus bodies are marketed by the Tata Motors under brands - the "Starbus" and "Starbus Ultra".
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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