Mahindra & Mahindra and Navistar International Corporation have announced that Mahindra has completed its purchase of the Navistar Group’s stake in Mahindra Navistar Automotives and Mahindra Navistar Engines. The deal has received regulatory approval in India and Mahindra has now taken complete ownership of operations and continues to sell MNAL and MNEPL products. This further shows the aggressiveness of Mahindra in expanding its market portfolio.
The buyout is not recent news as American company Navistar had previously announced in December 2012 its intention to exit the joint ventures. The reason Navistar withdrew is because it wishes to focus on strengthening its North American core businesses and will be pursuing near-term initiatives to improve the company’s return on invested capital performance, as it can no longer handle both businesses. The agreement will however allow Navistar to continue sourcing components from India while Mahindra would continue to provide engineering services to Navistar. In return the Navistar group will continue to support M&M through license agreements and extend necessary support to MNAL and MNEPL for the purposes of business continuity.
Mahindra also reaffirmed that it is fully committed to the truck and engine companies and would focus on further leveraging synergies between these two businesses and the Mahindra Group in order to make the commercial vehicles business a success.
