Mahindra & Mahindra (M&M) could well be eyeing the car and tractor businesses of the Rs 5,000 crore Sonalika group as it seeks to strengthen its leadership in the tractor segment.
The Hoshiarpur-based Sonalika has a technology deal with UK-based engine maker M G Rover. In addition, the deal will give M&M access to a ready-made car manufacturing unit.
The buzz of M&M’s interest in Sonalika’s businesses comes when Pawan Goenka, head of M&M’s automotive business, is slated to also take charge of the tractor division.
With differences cropping up in its existing joint venture with Renault over the Logan, M&M could well be looking elsewhere for satisfying its car market ambitions. But more than cars, it is the chance to acquire the fourth largest tractor maker that may be alluring for M&M.
Sonalika’s chairman L D Mittal said there was no truth in the rumours. “Corporates keep talking to each other all the time. We will let you know if there is any news to share… there is no truth
in this (acquisition buzz),”he told DNA.
To a DNA query, Goenka said, “As a policy we do not comment on speculative stories”.
Industry sources said Goenka had recently visited Sonalika’s car making facilities in Himachal Pradesh and that the valuation for this deal could be upwards of Rs 2,000 crore.
Mittal admitted that Goenka had indeed visited his facilities but said the discussion during this visit was confined to M&M’s desire to get some of its cars manufactured there. “Even this has not materialised,” Mittal said.
On the issue of valuation, he said “where is the need for valuation when there is no acquisition being discussed?”
The Sonalika group comprises separate companies including International Cars & Motors (ICML), International Tractors and an agri business venture.
Last year, Mittal had talked of launching a next generation SUV by using M G Rover engines under ICML but this has not materialised yet. At present, ICML sells MUV Rhino Rx in the domestic as well as overseas markets.
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