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Maruti Suzuki to acquire full equity of Suzuki Motor Gujarat

Oct 17, 2023

By: BlinkX Research Team

Suzuki Motor Gujarat (SMG), a wholly owned subsidiary of Suzuki Motor Corporation, is set to be acquired by Maruti Suzuki India Limited (MSIL). The Board of Directors at MSIL has given the green light for the purchase of 100% of SMG’s equity shares, subject to regulatory approvals. The move comes in response to the growing Indian car market and the need to increase production capacity to around 4 million cars annually by 2030-31.

As part of this consolidation, the Contract Manufacturing Agreement with SMG, dated December 17, 2015, will be terminated. The transaction, valued at INR 12,841.1 Crores, will involve the issuance of equity shares by MSIL to Suzuki Motor Corporation.

This strategic move aims to streamline production activities and supply chains for efficiency, especially in light of the coexistence of various powertrain technologies like EVs, hybrids, CNG, and ethanol. It ensures a smooth transition of operations and logistics, with no disruptions to vehicle supply.

The acquisition is aligned with MSIL's goal to meet the demands of a rapidly evolving automotive landscape and underscores its commitment to environmental sustainability.