Mahindra & Mahindra (M&M) is reportedly in discussions to acquire Japan-based Sumitomo Corporation’s entire stake in heavy vehicle manufacturer SML Isuzu, according to a March 24 report by CNBC-Awaaz. The potential deal is expected to strengthen M&M’s presence in the trucks and buses segment.
Sources indicate that M&M is considering a valuation of ₹1,400-1,500 per share for SML Isuzu. As of 1:05 pm on March 24, SML Isuzu shares were trading 5% higher at ₹1,732 apiece, giving the company a market capitalization of approximately ₹2,500 crore. The stock’s 52-week high stands at₹2,405, while its 52-week low is₹1,028.
The M&M board is likely to convene this week to evaluate the acquisition proposal, as per the report. However, M&M has declined to comment on the speculation.
As of December 2024, Sumitomo Corporation held a 43.96% stake in SML Isuzu, according to exchange data. Additionally, Japan’s Isuzu Motors, which manufactures SUVs and pickup trucks through another entity, holds a 15% stake in SML Isuzu.
Financially, SML Isuzu reported an 80.22% decline in net profit for the quarter ending December 2024, posting₹0.53 crore compared to₹2.68 crore in the same quarter the previous year. The company’s sales also dropped 14.07% year-over-year, falling from₹386.13 crore to₹331.80 crore.
At 1:10 pm on March 24, M&M shares on the BSE were trading 1.5% lower at ₹2,759 apiece.
Interestingly, this development follows a previous report by CNBC-TV18 in June 2023, which named JBM Auto as a top contender for acquiring SML Isuzu, as Sumitomo had been seeking to exit its India operations. At 1:16 pm on March 24, JBM Auto shares surged 14% to ₹646 apiece.
