South Korea’s watchdog nods Mahindra buy of Ssangyong

South Korea’s watchdog nods Mahindra buy of Ssangyong

Seoul: South Korea’s anti-trust watchdog said Friday it has approved the sale of troubled auto firm Ssangyong Motor to Indian carmaker Mahindra and Mahindra (M&M).

The green light from the Fair Trade Commission followed Mahindra’s due diligence on the Korean firm.

The commission said the deal would enhance competition in the domestic market and increase Ssangyong’s exports.

The Mahindra signed a preliminary agreement to buy a controlling stake in Ssangyong in August. A Mahindra executive had said a final agreement was expected in November.

Ssangyong, South Korea’s smallest carmaker, mainly manufactures low-priced but robust SUVs. It also makes sedans.

It was granted court protection from creditors in February 2009 after rising oil prices and slowing demand due to the global crisis hit SUV sales. Former Chinese parent Shanghai Automotive Industry Corp declined to inject more funds.

Ssangyong has struggled to stay afloat since a violent strike over job cuts disrupted production for almost 80 days last year.

If the deal goes through, Mahindra would become the second Indian carmaker to enter the South Korean market after Tata Motors, which bought truckmaker Daewoo Commercial Vehicle in 2004.