Mahindra & Mahindra likely to buy Reva, have Maini at helm

Is Mahindra & Mahindra close to acquiring Reva Electric Car Company?

Speculation has been rife in the market since this morning about the two companies being very close to signing a deal.

Reports suggest M&M would take 100% of Reva, gain management control but still retain Reva’s Chetan Maini at the helm of affairs.

Neither Maini nor Pawan Goenka, head of M&M’s automotive and farm equipment business, responded to calls. A senior Reva official declined to comment but an M&M source indicated that a deal was in the offing.

If the deal does materialise, what happens to the technological pact Reva has already signed with General Motors India to develop an electric Spark? Would GM India want to continue development of this vehicle under a rival car maker, M&M? GM India’s VP corporate affairs P Balendran was in China and declined to comment.

Reva is a joint venture between the Maini Group and US-based AEV LLC. It is also funded by Global Environment Fund and Draper Fisher Jurvetson. It is possible that the two foreign investors would exit in favour of M&M.

According to agency reports, Reva’s valuation is pegged at about $100 million.

Reva has been hailed as the pioneer in providing alternate fuel vehicle options, but the company has fallen short of funds in recent past to fund expansion plans.