The Mahindra Group has reiterated its position that the company is looking to explore opportunities to expand collaboration with the German VW Group in India, even as reports of a stake purchase again surfaced on September 23.
In a statement to stock exchanges, M&M has said, "Mahindra and VW Group continue to explore multiple opportunities to expand the collaboration potential." Underscoring the buzz, shares of M&M have risen by almost 10% in last five trading sessions.
This clarification by M&M comes as reports citing sources familiar with the development claimed that M&M is closer to inking a pact that eventually could lead to a stake purchase in Skoda Auto Volkswagen India, the arm of Europe’s largest carmaker. Autocar Professional's report citing sources said that Mahindra & Mahindra was keen on a 50% stake in Skoda Auto India at a valuation of $800 million to $1 billion.
The report also said that the board of directors of Skoda Auto are currently in India to 'define the contours of the agreement', and a deal may be announced shortly.
In July, Moneycontrol had reported people familiar with the matter that Mahindra & Mahindra and JSW Group - two of India’s largest mobility conglomerates - are in talks for a substantial stake in Skoda Auto Volkswagen India.
Skoda Auto Volkswagen India’s had reported a profit of Rs 309 crore in FY23, its highest in five years.
Mahindra and Mahindra had in 2022 signed a supply pact with Volkswagen for electric components, and has since then said that both companies 'continue to explore further potential opportunities for collaboration in India in the field of e-mobility.'
A Skoda Auto Volkswagen India spokesperson had told Moneycontrol in July that the company is "always considering new business opportunities and evaluating various options to ensure best possible solution to implement our strategy.”
Rajesh Jejurikar, during the June earnings call had said that the company is open to alliance opportunities. "In today's world we have to explore every other alliances opportunity to get a win-win, but organically we already seen very good traction in markets where we have a presence with our new products," Jejurikar had said.
Read More: Open to expanding cooperation with Volkswagen on EVs, says M&M official
On the expansion of the agreement, Anish Shah, Managing Director, M&M had told Moneycontrol in July, “While there are lots of rumours around on various different things, at any point of time, with any of the businesses, if there is a solid reason to do a partnership that benefits us, that is something we would look at and that is where we are right now.”
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