M&M makes open offer of Rs. 490 crores to public shareholders to acquire Punjab Tractors

Mahindra & Mahindra Limited made a Rs. 490 crores ($110 mn) open offer for a further 20% in Punjab Tractors Limited and its subsidiaries, as required by law after it won the bidding for a 43.3% stake last week.

Mahindra, India’s top tractor and utility vehicle maker, and subsidiary Mahindra Holdings & Finance Limited are buying stakes held by private equity firm Actis and the Burman family in a deal that values Punjab at nearly Rs. 2200 crores.

In a newspaper advertisement, Mahindra made an offer to buy up to 12.15 mn shares from shareholders of Punjab Tractors, which makes tractors and farm equipment at Rs. 360 a share, the same price that it agreed to pay for the 43.3% stake. Separately, Mahindra made an offer to buy almost 480,000 shares, or 20%, in Swaraj Automotives Limited, in which Punjab Tractors owns 24.2%, at Rs. 244 per share. Mahindra also made an open offer to buy 20%, or 2.48 mn shares in Swaraj Engines Limited, in which Punjab Tractors owns 33.2%, at Rs. 151 a share.

The financing of the three offers would be through internal accruals and/or corporate borrowings. The offers open on May 3 and close on May 22.

Read the article in The Economic Times.
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M&M wins Punjab Tractors bid; to pay Rs. 951 crores for 43.5% stake

M&M wins Punjab Tractors bid; to pay Rs. 951 crores for 43.5% stake

Mahindra & Mahindra (M&M), the country’s largest tractor company, has turned out to be the winner in the Punjab Tractors stake sale. M&M will shell out Rs. 360 per share for a 43.5% stake, valuing Punjab Tractors at around Rs. 2200 crores. M&M will end up paying a total consideration of a little over Rs. 951 crores in an all-cash deal to buy out private equity firm Actis and the Burman family of Dabur from Punjab Tractors. Actis will gross Rs. 634 crores from the sale of its 29% in Punjab Tractors, while the Burman family will get around Rs. 317 crores for its 14.5% stake.

The final round of bidding boiled down to a contest between M&M and Ashok Leyland. Initially, Ashok Leyland was known to have offered Rs. 320 per share of PTL while M&M was said to have made offers in the range of Rs. 330-335 per share. M&M also offered a part-cash, part-stock option but finally clinched the deal when it upped its all-cash offer to Rs 360 per share. M&M will now have to make an open offer to buy an additional 20% in Punjab Tractors, as per SEBI regulations.

Read the article in The Economic Times.

Ashok Leyland, M&M lead Punjab Tractors bid race; TAFE, Tatas back out, Tata Group buys plant in South Africa

Ashok Leyland Limited and Mahindra & Mahindra Limited appear to be the frontrunners in the race to acquire a stake of around 43% in Punjab Tractors Limited. The 43% stake has been put on the block by owners, Delhi-based private equity fund Actis and the Burman family, promoter of Dabur. According to unconfirmed reports, Ashok Leyland has placed a higher bid in the range of Rs. 320-380 per share. The Ashok Leyland bid demands some guarantees from the management. Details of M&M’s bid were not known.

If it does eventually manage to acquire the share, Ashok Leyland will have to make a mandatory open offer of another 20% of Punjab Tractors and would eventually become a majority shareholder of the company. An announcement on the stake sale is expected shortly. However, it is still not clear whether Leyland has also managed to acquire the 14% stake Punjab Tractors holds in group company Swaraj Mazda Limited and the 33% stake in Swaraj Engines Limited through the bidding process.

Punjab Tractors has strong brand equity in the tractor market, especially in the northern part of India and the winning bidder could enter the fast-growing tractor segment through this acquisition.

In a related development, of the four front-runners, the Tata Group, uncomfortable with the valuation of the deal, has backed out of the bidding process, while Tractor and Farm Equipment (TAFE) is also believed to have pulled out of the race. The final bids have seen the list of bidders for Punjab Tractors coming down significantly. That list includes Sonalika (International Tractors), Escorts, Italian tractor company Same Duetz-Fahr and a private equity consortium that was backing Punjab Tractors’ former boss Yash Mahajan.

Meanwhile, the Tata Group has acquired a car making plant in Pretoria in South Africa for an undisclosed amount, which will be used as a base for Tata Motors exports to Europe, besides catering to the South African market.

Read the articles in DNA Money and Business Standard.
Related Post: Actis and the Burmans seek re-bids for Punjab Tractors

Actis and the Burmans seek re-bids for Punjab Tractors

Private equity fund Actis and the Burman family, the promoters of Dabur, who together hold a controlling 43.5% in Punjab Tractors (PTL), have rejected offers for the acquisition of their stake from seven interested parties. These companies include Mahindra & Mahindra, Ashok Leyland and Sonalika Tractors and have now been asked to make binding bids by next Monday.

The re-bid was reportedly prompted due to the non-binding nature of the offers. Also, the bids were much lower than the company’s share price, which has shot up around 30% in the month after the bids were invited.

Actis holds 29.5% and the Burmans hold 14% in the Rs. 958-crore tractor company, while the rest is held by financial institutions, the public and banks. Punjab Tractors is India’s fourth-largest tractor making company, with an 8% market share.

Read Business Standard article.
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M&M, TAFE eye Actis’ 29% in Punjab Tractors
M&M, Escorts vie for stake in Punjab Tractors; Actis, Burmans to sell out
Ashok Leyland bids for Punjab Tractors

Mahindra and Mahindra, Renault and Nissan form Rs. 4000 crore-joint venture in Tamil Nadu

Auto and auto components major Mahindra and Mahindra (M&M) has formed a tripartite joint venture with global auto giants, France’s Renault and Nissan from Japan, to set up a Rs. 4000 crore-greenfield automobile plant at Oragadam, near Chennai in Tamil Nadu. The facility will have a capacity to manufacture 400,000 units by 2009 and would be used by all the three auto majors for production of vehicles from their respective stables. M&M will hold 50% stake in the new venture, while the rest will be jointly head by Renault and Nissan of Japan. The Tamil Nadu government would provide land and incentives for the project. M&M President, automotive sector, Pawan Goenka was named the chairman of the JV company.

The Tamil Nadu government has already had some land and would acquire more to meet the needs of the facility, which would come up on a 925-acre plot. The new facility would see to it that those displaced due to acquisition of land for the project would be relocated at a place convenient to them. The new company would also start vocational schools in the area to train students and absorb them in the facility.

The project would consist of integrated automobile manufacturing facilities which would include engine plant, transmission plant, press shop, body shop, paint shop and assembly line, an official press release here said, adding this would be India’s biggest vehicle manufacturing centre at a single location. It would involve manufacture of 50,000 tractors per annum and there would be a Mahindra Research Valley in the Mahindra World City near Chennai.

The project would result in gross value addition of about Rs. 18,000 crores per annum to Tamil Nadu’s GDP and the additional investment in the State by vendors and supporting service providers was expected to be about Rs. 10,000 crores. The new facility would provide direct employment to 5000 people and indirect employment to many more.

M&M and Renault already have an existing JV which is manufacturing the Logan brand of cars.

Read the articles in The Economic Times and Business Standard.

M&M, Escorts vie for stake in Punjab Tractors; Actis, Burmans to sell out

Mahindra and Mahindra (M&M) has put in a non-binding bid for acquiring stake in Punjab Tractors. The Burman family, which holds a 14.5% stake in Punjab Tractors, is interested in selling its stake in the company. Private equity firm Actis which is another major stakeholder in Punjab Tractors has also put in its 29% stake in Punjab Tractors on the block. The Burmans, promoters of Dabur India, are reportedly interested in selling their stake to the buyer of Actis’ stake in the company. Escorts also has shown interest in buying stake in Punjab Tractors, but has not put in a formal bid yet.

Read the Business Standard articles – 1 2.
Related Post: M&M, TAFE eye Actis’ 29% in Punjab Tractors

M&M fails in its bid to buy Tractorul

Mahindra & Mahindra Limited’s (M&M) bid to buy Romanian tractor maker Tractorul Brasov SA has failed due to the Romanian government rejecting debt guarantees as sought by M&M. M&M has acquired a number of tractor companies and auto-parts companies overseas in the past as it seeks to gain technology and tap bigger markets. The Mumbai-based company plans to spend Rs. 400 crores ($90 mn) over the next two years on expansion and developing new models. The company plans to make more acquisitions outside India this year.

Read Anand Mahindra’s comments in the article in Business Standard.

M&M, TAFE eye Actis’ 29% in Punjab Tractors

Actis’ 29% stake in India’s most profitable farm tractors and forklifts company, Punjab Tractors Limited (PTL), is probably up for sale. Mahindra & Mahindra (M&M) and Tractor & Farm Equipment (TAFE) seem to be the interested parties. The Burman family of the Dabur group, which holds 14% in PTL, may also exit along with Actis.

Actis’ stake is valued at Rs. 410 crores, but the buyer may also have to pay a control premium. It would also have to make an open offer to the remaining shareholders.

Read the complete Economic Times article.

Mahindra & Mahindra to buy German forging firm Schoneweiss

Mahindra & Mahindra (M&M) is acquiring 90.47% stake in Germany-based forging company Schoneweiss. Schoneweiss is one of the top five axle beam manufacturers in the world, and specializes in suspension, power train and engine parts. The acquisition would be through its subsidiaries. However, financial details of the transaction were not disclosed.

Read The Calcutta Telegraph article.

M&M has been quite active on the acquisitions front. Last month, it announced the acquisition of casting and ferrites firm DGP Hinoday Industries. Then, in September, M&M announced that it would acquire a 67.9% stake in Jeco Holding AG, one of the top five forging companies in Germany, for an enterprise value of Rs. 830 crores (€140 mn). Last year, M&M bought Rajkot-based SAR Transmission. This was followed by the Amforge Chakan unit and Stokes Forging of the UK.