Mahindra signs for SsangYong

Indian industrial giant Mahindra and SsangYong Motor have signed "a definitive agreement". According to it Mahindra take over problem South Korean company.

The total cost of acquisition is $463-million, $378-million in new stock and $85-million in corporate bonds, the two companies announced.

SsangYong has been undergoing corporate therapy since February, 2009.

Pawan Goenka, head of Mahindra's automotive section, said: "The coming together of Mahindra and SsangYong will result in a competitive global utility vehicle player."

He said that the both company would gain - Mahindra will bring competence in sourcing, marketing and financial capability and SsangYong will add technological advantages.

Mahindra decided "to leverage the combined synergies" by investing in a new SsangYong product portfolio for global markets."There is also an opportunity to introduce a premium portfolio of SUVs in the Indian market, providing a new growth avenue for SsangYong and further strengthening our dominant position in the UV area," he added.

The acquisition will offer financial stability to SsangYong and the two companies will work to further strengthen SsangYong's product portfolio across the globe, the Pawan Goenka said.