Automobile components maker JBM Auto is the leading contender to acquire a controlling stake in SML Isuzu, the Chandigarh-headquartered commercial vehicle maker whose promoters include the Japan-based Sumitomo Corporation and Isuzu Motors, CNBC TV-18 reported on June 16, citing sources.
SML Isuzu's Japanese promoters are looking to exit the company, and have entered into an advanced stage of discussions with JBM Auto for the sale of their stake, the persons privy to the development said.
The deal is likely to value the company at premium to current market price, the sources added.
JBM Auto and SML Isuzu were yet to respond to the news, and the queries sent by the CNBC TV-18 to the management of both the companies were unanswered by the time this report was published.
Among the two Japanese promoters of SML Isuzu, Sumitomo Corporation owns 43.96 percent stake and Isuzo Motors owns 15 percent.
JBM Auto is exploring multiple options for acquiring their stake, including a cash and share swap deal, the sources added.
The potential acquisition is expected to allow JBM Auto to gain a foothold in new markets related to commercial vehicles, including the school bus segment, analysts said, adding that the company will also benefit from the extensive dealer network of SML Isuzu.
In the trading session on June 16, the shares of SML Isuzu closed at Rs 1,141 on the BSE, nearly two percent higher as against the previous day's close.
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