Tata Motors will buy the 49 percent stake held by its partner Marcopolo in the bus-making joint venture for Rs 100 crore bringing curtains to the 14-year old partnership and paving the way for a smooth exit for the Brazilian company.
Post the purchase, Tata Marcopolo Motors (TMML) will become a wholly owned subsidiary of Tata Motors. All technologies pertaining to existing bus body products manufactured will continue to vest with TMML.
The all-cash deal is expected to close by end of February, 2021. "As consequence of its refreshed business strategy, Marcopolo S.A is exiting the JV", said Tata Motors in a statement without elaborating further.
The subsidiary will continue with the ‘Marcopolo’ trademark for a minimum of three years with a non-compete provision in India for a corresponding period.
“The transaction will not result in any impact on TMML’s operations or the continued sales and service of Tata Motors’ customers. Tata Motors, Marcopolo S.A. and TMML intend to maintain an open channel for future collaboration opportunities around bus body designs and technical consulting services,” said Tata Motors.
The JV has manufacturing facilities in Dharwad and Lucknow where it builds bus bodies on chassis supplied by Tata Motors and marketed by it under the “Starbus” and “Starbus Ultra” bus brands.
As of end of FY20 TMML recorded a profit of Rs 20.63 crore on a turnover of Rs 650.55 crore, which was a growth of 13.5 percent compared to the turnover of Rs 573.15 crore registered in FY18.
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