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MUMBAI: Tata Motors Ltd (TML) has entered into a share purchase agreement with Brazilian bus and coach manufacturer Marcopolo S.A. to buy out the latter’s 49% share the their joint venture Tata Marcopolo Motors Ltd (TMML) for 99.96 crore, the company said in regulatory filing on Thursday morning.

Tata Motors and Marcopolo S.A. have entered into a share purchase agreement where the company will purchase the balance 49% shareholding in Tata Marcopolo Motors Ltd or TMML for a cash consideration of 99.96 crore. Post the purchase, TMML will become a wholly owned subsidiary of the company," the company said in a note to BSE.

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The said acquisition would be completed by February 28, 2021, the company said.

Formed in 2006, Tata Marcopolo Motors was a 51:49 joint venture between India's largest commercial vehicle (CV) manufacturer and Marcopolo S.A., also one of the largest bus manufacturers globally.

Tata Marcopolo Motors was one of the first bus manufacturers to introduce low-floor passenger buses for public transportation in Delhi, Mumbai and other cities. A low-floor bus has a relatively lower ground clearance as compared to regular buses thus making it comfortable for the passengers to step in.

The joint venture manufactured buses at Tata Motors’ production units in Lucknow and Dharwad where it builds bus bodies on chassis supplied by the homegrown CV maker. The vehicles are marketed by Tata Motors under its Starbus and Starbus Ultra brands.

“After a successful venture in India, and as a consequence of its refreshed business strategy, Marcopolo S.A. has decided to exit from the joint venture and offered to sell its 49% shareholding in TMML," the company said.

While all technologies around the bus body products currently manufactured by the company will continue to vest with TMML, Marcopolo will continue to license the Marcopolo trademarks to TMML for a minimum period of 3 years, Tata Motors said, clarifying that the transaction would not impact the bus maker's operations including sales and service of existing 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," it added.

Tata Marcopolo Motors’ turnover and profit after tax (PAT) for FY2020 stood at 651 crore and 21 crore, respectively.

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