CCI approves JSW's acquisition of up to 38% stake in MG Motor India | Mint
Active Stocks
Fri Feb 23 2024 15:58:13
  1. Tata Steel share price
  2. 145.50 -0.24%
  1. State Bank Of India share price
  2. 759.40 -0.86%
  1. HDFC Bank share price
  2. 1,420.90 0.08%
  1. NTPC share price
  2. 337.70 -0.54%
  1. ITC share price
  2. 411.60 -0.65%
Business News/ Companies / News/  CCI approves JSW's acquisition of up to 38% stake in MG Motor India

CCI approves JSW's acquisition of up to 38% stake in MG Motor India

JSW Ventures Singapore, a subsidiary of JSW International Tradecorp and part of JSW Group, has received approval from the Competition Commission of India (CCI) to acquire up to 38% of MG Motor India.

File image of Sajjan JindalPremium
File image of Sajjan Jindal

The Competition Commission of India (CCI) on January 23 approved JSW Ventures Singapore's acquisition of up to 38 percent of MG Motor India, as per an order statement.

"The Commission approved the acquisition by JSW Ventures Singapore Pte. Limited (Acquirer), for up to approximately 38% of the share capital of MG Motor India Private Limited (Target). Detailed order of the Commission will follow," it said.

JSW Ventures Singapore is a newly incorporated entity which is a wholly owned subsidiary of JSW International Tradecorp and belongs to JSW Group.

First reports of the acquisition broke in June 2023 and it was anticipated that Sajjan Jindal would possess approximately 45-48 percent ownership in MG Motor India, while dealers and Indian employees are likely to hold 5-8 percent.

According to a senior government official, “It will become an Indian entity, instead of a Chinese one, with an eventual India listing in the next few years."

As part of this transition, the top management and board of the company will have a larger share of Indians.

MG Motor offers various models such as the Comet and ZS electric vehicles, in addition to the Astor, Hector, and Gloster. Despite being owned by a Chinese company, MG Motor aimed to highlight the British heritage of the MG brand during its launch in 2019, employing actor Benedict Cumberbatch as a brand ambassador.

The Acquisition Deal

In December it was reported that JSW Group would own 35 percent in a newly created joint venture (JV) with SAIC Motor Corp. Ltd (which owns MG Motor India) that would focus on electric vehicles (EVs), with a plan to turn majority shareholder in two years. JSW executives said the rest of the ownership of the JV has not been decided yet, but the JV would help transform MG Motor’s operations in India as well. A JSW Group spokesperson did not comment on the value of the 35% stake.

The shareholder agreement and share purchase and share subscription agreement were signed by Wang Xiaoqiu, president of China-based SAIC Motor, and JSW Group’s Parth Jindal at the MG Office in London, the companies said in a joint statement released on Thursday.

“According to the agreement signed, JSW will hold 35 percent in the Indian JV operations. SAIC will continue supporting the JV with advanced technology and products to deliver extraordinary mobility solutions with an unwavering focus on the Indian consumer," the statement said, without going into the specifics of the remaining ownership.

This partnership will give the JSW Group its much-desired entry into the EV space.

Also Read | Will Sajjan Jindal's EV gamble pay off?

“Our strategic collaboration with SAIC Motor aims to grow and transform the MG Motor operations in India with a focus on green mobility solutions. The JV’s focus on broader localisation initiatives will yield financially accretive synergies... One of the key focus areas of this JV will be to pursue the development of the EV ecosystem and to take a leadership position in this space... We cannot wait to get going," Parth Jindal was quoted in the statement.

“SAIC Motor and JSW Group will create strategic synergies by bringing together resources in the field of automobiles and new technology. The JV will also undertake multiple new initiatives, including augmenting local sourcing, improving charging infrastructure, expansion of production capacity, and introducing a broader range of vehicles with a focus on green mobility," the statement added.

EV Market Focus

It is estimated that India’s EV market, valued at $2 billion in 2023, will more than triple to $7.09 billion by 2025. The number of EVs on the roads is likely to increase to 50 million by 2030 from about 1.4 million as of August 2022, according to industry estimates. By 2030, the Indian EV market is expected to reach 10 million units in annual sales.

Analysts say the deal is big for the JSW Group, which is also in discussions to buy Ford’s Chennai plant to use for assembling electric vehicles, and a big plus for the automobile sector in India.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 24 Jan 2024, 08:55 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App