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Old 12th August 2010, 12:17   #31
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Its a very good move by M&M. I said it when Tata's bought JLR, and we see the change in 3 years, and now maintain the same for Mahindra's.
We Indians can manage things much better, because we are Hungry to Prove!
As someone commented SS has some presence and some good/better designs than Mahindra's. In todays times $500million is no big amount for a Car company, who's already making good profits, better than the industry average.
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Old 12th August 2010, 12:49   #32
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There is a major announcement coming up from Mahindra today at 2pm.. lets see
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Old 12th August 2010, 14:21   #33
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FX45,

Any updates? Btw, Mahindra share fell .55% in the morning.
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Old 12th August 2010, 14:51   #34
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The announcement from SS and excerpt from ET:

Quote:
Cash-strapped car maker Ssangyong Motor Co. on Thursday chose India’s Mahindra & Mahindra Ltd. as the preferred bidder to acquire a majority stake in the South Korean company, but the lack of financial details in Ssangyong’s announcement has left investors unimpressed.
In midday trade on the Bombay Stock Exchange, shares of Mahindra, the largest Indian sport-utility vehicles maker by sales, were trading down 0.8% at 622.40 rupees, weaker than the 0.3% decline in the benchmark index, Sensex. The shares had slipped to as low as 615.30 rupees earlier in the session.

The news came after only three companies–Mahindra & Mahindra, Raghav Industries and Daewoo Bus–out of the six bidders that qualified in June to carry out an initial due diligence on Ssangyong submitted binding bids earlier this week. Three others dropped out of the race for different reasons.

Ssangyong Thursday said the company and its lead managers plan to sign an initial pact with Mahindra by the end of August after the Indian company pays 5% of the acquisition price it offered in binding bids, but it did not elaborate on the offered price.

Investors were expecting more details, especially after driving Mahindra’s stock up by more than 15% since May 29 (up to Wednesday’s close), when the company said it had informed Ssangyong of its interest.
While it is widely believed that a deal with Ssangyong could pave way for Mahindra’s global ambitions by giving it access to the former’s marketing and distribution network in overseas markets plus the technological and design capabilities, analysts are staying put for now.

“There are no details on the valuation, which makes it difficult to take a call. We have yet to know what is the risk-reward scenario,” says Vaishali Jajoo, auto analyst, Angel Broking. She rates Mahindra a Buy with a price target of 771 rupees.

Her views are mirrored by Jatin Chawla of IIFL Capital, who says “there are no financial details to work on.”

“Given Mahindra’s lower debt-equity ratio (0.4 times) and strong cash reserves of over 20 billion rupees, the deal is unlikely to strain finances. Yet it remains to be seen what is the amount of money that they may have to invest into Ssangyong post the deal,” says another analyst at a domestic brokerage.

Ssangyong currently owes 740 billion South Korean won ($626 million) to financial firms and subcontractors.
“Given Mahindra’s lower debt-equity ratio (0.4 times) and strong cash reserves of over 20 billion rupees, the deal is unlikely to strain finances. Yet it remains to be seen what is the amount of money that they may have to invest into Ssangyong post the deal,” says another analyst at a domestic brokerage.

Ssangyong currently owes 740 billion South Korean won ($626 million) to financial firms and subcontractors.

Last edited by sarmarishi : 12th August 2010 at 14:53.
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Old 12th August 2010, 15:02   #35
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Sarmarishi, thi is an old news. As of now, M&M share is trading 2% above what is given in the news.
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Old 12th August 2010, 16:13   #36
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just got a call that mahindra has acquired a majority stake in the korean company

will update more soon
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Old 12th August 2010, 16:41   #37
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here we go

Mahindra selected as preferred bidder for Ssangyong Motor - CNBC-TV18 -
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Old 12th August 2010, 17:30   #38
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ACI has put up a story as well. That Black Rexton looks bling

M&M closes in on SsangYong | Autocar India
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Old 12th August 2010, 21:35   #39
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Mahindra Bags Ssangyong.

Mahindra wins bid for Ssangyong acquisition

M&M wins bid for acquisition of Ssangyong Motor Company
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Old 12th August 2010, 22:00   #40
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Hope M&M brings them out of trouble!
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Old 13th August 2010, 01:16   #41
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Talking M&M wins race for Ssangyong.



M&M wins race for Ssangyong: Times of India

Quote:
MUMBAI: Mahindra & Mahindra (M&M) finally tasted success in a strategic international acquisition as it emerged as the preferred bidder for a controlling stake in cash-strapped Korean SUV maker Ssangyong. The deal will provide the Indian utility vehicle major access to technology and new markets.

The company, that had lost out of the race for Jaguar and Land Rover to fellow Indian company Tata Motors in 2008, emerged winner in a three-company race for the loss-making Ssangyong, which exports vehicles to Asia-Pacific, Europe, Africa, the Middle-East and South America. While the development was confirmed by both M&M and Ssangyong, the companies refused to divulge details on the price offered by M&M.

" Korea is one of the world's leading centres of automotive excellence and Ssangyong brings with it a rich legacy of R&D and innovation. Mahindra and Ssangyong will create synergy, which will make us significant global players," Mahindra group vice-chairman and managing directorAnand Mahindra said. "This acquisition will provide us with a great opportunity to accelerate our progress as a global player in SUVs".

Ssangyong Motor, Korea's smallest car maker by sales with a 2% share, suffered a severe cash shortage due to a slump in sales of fuel-guzzling SUVs, before being placed in court-led bankruptcy protection in early 2009. The company sold 43,811 vehicles in the first seven months of 2010, a 235.2% jump from a year ago. For the first quarter, it reported that its net loss narrowed by more than 90% from a year earlier and shares in the company ended up 0.3% on Tuesday, outperforming Korean stock market's 0.5% fall.

Ssangyong had $640 million in long-term debt as of December, M&M Group CFOBharat Doshi said. "The borrowings will be repaid with the money Mahindra is paying to acquire the stake," Pawan Goenka, president of M&M's automotive division said. "When the company is handed over to us, all existing long-term debt will be cleared.

Last edited by Technocrat : 13th August 2010 at 01:24. Reason: Post moved to correct thread, thanks
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Old 13th August 2010, 09:41   #42
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Great news ,
I hope they make will invest in building Mahindra brand globally as well and will not just focus on bringing Ssongyoung vehicles to India under M&M badge.

I think M&M stock will fall initially till the takeover and for first few months as most of the institutional investors are concerned about immediate financial position for next 3-6 months.

Once they are able to turnaround the company M&M stock will outperform just like Tata Motors stock is performing after JLR returned to profit.
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Old 13th August 2010, 11:45   #43
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M&M goes global after the recent crop of companies like Tata and Geely. The deal is of great value to M&M IMHO. They get access to everything from Ssangyong's vehicles, platforms, technologies and most importantly, their global distribution network. I read somewhere that Ssangyong currently has over 1,200 dealers worldwide.

One possibility - M&M's World SUV sold as a Ssangyong in Korea and other markets and vice-versa.

One more possibility - M&M can make Ssangyong their luxury brand and market expensive vehicles under that name.
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Old 13th August 2010, 14:35   #44
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M&M has badly messed up with its image in the US with the recent lawsuits etc.

With the acqusition of SsangYong, what it can do is, M&M must lunch that brand in the US and market Scorpio and the upcoming SUV under SsangYong Brand name.
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Old 13th August 2010, 14:42   #45
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The lawsuit in US is due to delay in bringing product to market by appointed dealer. So it is actually not a great damage to brand itself.


Outside Korea Ssanyong does not have any great brand value. It is where Hyndyai was few years ago with an obvious negativity around it. So it does not make sense for Mahindra but invest in building Ssangyong brand from longer perspective.

For long term value they will be better off building their own brand starting from clean slate.
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