Maruti board nod for share purchase pact
Will acquire 100% stake in SMG from Japanese parent Suzuki Motor Corp for rs12,841 cr; Voting for shareholder approval begins on Wednesday
The consideration payable by the company for such purchase of 100% of SMG’s equity shares shall be discharged by way of issue and allotment of 1,23,22,514 equity shares of the company having face value of Rs5 each to SMC, at a price of Rs10,420.85 per share, on a preferential basis
New Delhi: Maruti Suzuki India on Tuesday said its board has approved a proposal to execute a share purchase agreement to acquire 100 per cent equity capital of Suzuki Motor Gujarat (SMG) from Suzuki Motor Corporation.
The auto major has executed the share purchase and subscription agreement (SPSA) with SMC and SMG to acquire 12,84,11,07,500 shares of Rs10 each, representing 100 per cent equity capital of SMG owned by SMC, for a total purchase consideration of Rs12,841.1 crore, Maruti Suzuki India (MSI) said in a regulatory filing.
The consideration payable by the company for such purchase of 100 per cent of SMG’s equity shares shall be discharged by way of issue and allotment of 1,23,22,514 equity shares of the company having face value of Rs 5 each to SMC, at a price of Rs 10,420.85 per share, on a preferential basis, it added. Voting for shareholder approval begins on Wednesday and will go on for a month.
In August, the company’s board had approved issuance of shares on a preferential basis to SMC as consideration for acquisition of 100 per cent stake in SMG. Post the acquisition, SMG would become a wholly-owned subsidiary of MSI. MSI board, in its meeting on July 31, 2023 had approved termination of the contract manufacturing agreement with SMG and acquiring its shares at a price to be determined in accordance with all applicable laws and regulations.
MSI announced that it will acquire the Gujarat-based production facility of its parent firm SMC to reduce complexity and bring all manufacturing-related activities in the country under one entity. A fully-owned subsidiary of SMC, SMG supplies its entire production exclusively to Maruti Suzuki India. SMG, which was incorporated in 2014, has a production facility in Gujarat with an installed capacity of 7.5 lakh units per annum. MSI shares were trading 0.69 per cent down at Rs 10,635.60 apiece on the BSE.
