Mahindra signs deal to buy Ssangyong for $464 mn

Mahindra signs deal to buy Ssangyong for $464 mn

Seoul: Mahindra & Mahindra Ltd signed a deal to buy South Korea’s money-losing Ssangyong Motor Co Ltd for 522.5 billion won ($464 million), Ssangyong Motor said on Tuesday.

Ssangyong said it expects the sales process to be completed in March next year.

The widely-expected deal sent Ssangyong shares jumping briefly before falling 0.3% in a broader market down 0.83%.

The news came as Hyundai Motor shares fell almost 4% on worries that deepening labour disputes could lead to major disruption at South Korea’s largest automaker.

Investors are cautious about the major turnaround at SSangyopng, a SUV maker that has been under court-led restructuring since February 2009 as the global recession hit car sales.

“The signing has been already expected, and the question is whether Mahindra would invest in Ssangyong and help the South Korean company launch successful new model line-ups," said Lee Sang-hyun, an analyst at NH Investment & Securities.

It remains to be seen whether Mahindra would be able to rescue the troubled carmaker given its lack of global presence and expertise in SUVs, Sssangyong’s stronghold, analysts said.

Ssanyong is the maker of Rexton and Kyron SUVs and the Chairman luxury sedan also exports to China, Russia, Europe and the west Asia.