Maruti Suzuki India Ltd (MSIL), the country’s largest carmaker, said on Tuesday it will acquire Suzuki Motor Corp.’s small car manufacturing facility in Gujarat by issuing preferential shares instead of paying cash.
The issuance of new shares will lead to an equity dilution of around 4% in MSIL, and increase Suzuki’s ownership in the New Delhi-based carmaker by 1.8% to 58.28%, based on the current market price and Suzuki Motor Gujarat (SMG) plant’s book value of ₹12,755 crore.
Consequently, the unit will become a wholly-owned subsidiary of Maruti Suzuki, and its key management positions, some of which are currently held by Suzuki employees from Japan, will be taken over by the Indian team.
With this deal, Maruti Suzuki will aim to enhance its operational and organizational efficiencies, and double its manufacturing capacity by consolidating production within a single management entity.
According to Maruti, the share swap approach will minimize adverse effects on earnings per share (EPS) and profits compared to a cash transaction, as it would have resulted in a loss of interest income.
To be sure, Maruti currently has cash reserves of about ₹46,800 crore.
Bu hikaye Mint Mumbai dergisinin August 09, 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Mint Mumbai dergisinin August 09, 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
India in economic sweet spot, inflation to moderate: Moody's
India's economy is in a sweet spot and its inflation is expected to moderate despite a temporary spurt, Moody's said, projecting optimism about the country's growth prospects despite recent underwhelming data.
Incentive engine to drive modern ships
Subsidies for green, high-tech ships under ₹18,000 cr policy
Cement firms wage war on costs as competition soars
India's cement makers who once flexed their pricing muscles are caught in a bruising price war, eroding margins at a time of rising demand.
Saudi Arabia doesn’t have enough money for its futuristic city
The giant futuristic planned city of Neom is proving a headache for Saudi Arabia. Costs are up, schedules are delayed, and in recent days the world’s largest construction project replaced its chief executive of six years.
EV adoption is a marathon, not a sprint: Audi India
The slowdown in electric vehicle (EV) sales is temporary, and the industry will grow over time, Audi India head Balbir Singh Dhillon said, pointing to the need for extensive charging networks and supportive government policies.
India's trade gap with China soars in Apr-Oct
The country's green transition increases reliance on Chinese imports
14 nations eye India's generic drug model
Countries will specify their requirements, with HLL and MEA coordinating with them for the pharma exports
India urges $1.3 tn annual climate grant
Intervening on behalf of like-minded developing countries (LMDCs), India said that developed countries need to commit to provide and mobilise at least $1.3 trillion every year in the New Collective Quantified Goal (NCQG) till 2030.
Over 600 mn cyberattacks daily, AI can secure devices
Microsoft is developing a password-free authentication process to eliminate the risk of breaches
Small businesses ramping up cybersecurity, thanks to AI
Rising AI adoption is helping cybersecurity providers hike their marketable base in India
