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M&M to buy 55.2% stake in Reva
Mahindra & Mahindra announced on Wednesday to buy 55.2 per cent stake in electric car-maker REVA.
The two companies signed on Wednesday an agreement, under which M&M will acquire 55.2 per cent stake in REVA Electric Car Company by a combination of equity purchase from REVA's promoters and a fresh infusion of over Rs 45 crore (Rs 450 million) into the company, the auto major said.
Post the buyout, the Bengaluru-based company will be renamed as Mahindra REVA Electric Vehicle Co Ltd with M&M's president for the automotive business Pawan Goenka as its chairman.
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M&M to buy 55.2% stake in Reva
REVA's deputy chairman and chief technology officer Chetan Maini will play the role of chief of technology and strategy in mahindra REVA.
"This is a key strategic acquisition for Mahindra in its march towards sustainable mobility. Mahindra and REVA bring together complementary strengths," Goenka said.
With M&M's global distribution network, REVA's vehicles have a potential to significantly gain in market penetration, he added.
M&M is currently working on a number of eco-friendly technologies.
It recently showcased a diesel hybrid version of its sports utility vehicle Scorpio and a hydrogen-powered three-wheeler Alfa.
Under the agreement, the new board of Mahindra REVA will have five nominees from M&M, two from Reva's founder the Maini family and one from California-based AEV LLC, REVA's co-founder.
"The EV market is poised to grow significantly and we conclude that in order to seize the opportunity, we needed the resources and experience of a major automotive manufacturer," Maini said.
As a result of M&M's investment, Mahindra REVA will be able to "scale, innovate and accelerate" and will be able to deliver better products to more customers in more places, he added.
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M&M to buy 55.2% stake in Reva
The Mumbai-based M&M had also developed an electric three-wheeler Bijlee in 1999 and is now building an electric version of its mini truck Maxximo.
"Mahindra REVA's EV technology will be adapted for these and other M&M vehicles," the company said. M&M's shares were trading 2.85 per cent up at Rs 530.85 on the Bombay Stock Exchange in the mid-session.
The scrip touched an intra-day high of Rs 538.55.
In April, REVA had said it was open to undertaking contract manufacturing for other companies, besides General Motors (GM) with which it has a tie-up for making electric 'Spark'. REVA and GM had last year announced to produce electric Spark and the prototype was showcased in January.
Maini had said the cars will be ready by this year and the commercial production is likely to start sometime next year at GM's facility.
The current production facility at Bengaluru has an annual capacity of 6,000 units. It is expanding the capacity by 30,000 units in a new manufacturing facility in Bengaluru.