Auto major to pay Rs103 cr for 55 pc stake
MUMBAI: Even as auto industry is passing through its worst phase in the recent history, Mahindra & Mahindra Ltd (M&M) said it had agreed to buy a 55 per cent stake in the ride-hailing firm Meru Cabs, thus planning a serious entry into the fast-growing market for shared mobility.
M&M will pay up to Rs103 crore for acquiring the stake which will be done through an issue of new shares. In a stock exchange filing on Saturday, M&M also said that it has an option to buy the remaining 45 per cent stake in Meru from the existing investors for up to Rs98 crore.
Meru Travel Solutions Pvt Ltd is a holding entity and via its subsidiaries, operates in ride hail segment and also in corporate transportation solutions space. Meru was one of the first radio taxi operators in the ride hail segment.
M&M is likely to make the first tranche of investment in Meru Travel Solutions Pvt Ltd by the end of October.
“After investment of the first tranche in Meru, the company will have the right to appoint a majority of the directors on the board of Meru and as such will control the composition of the board of directors of Meru,” M&M said.
Once the deal is closed, the other subsidiaries of Meru including Meru Mobility Tech Pvt Ltd, V Link Automotive Services Pvt Ltd and V Link Fleet Solutions Pvt Ltd will become the subsidiaries of M&M. The Mumbai-based automaker is already an investor in self-drive car rental platform ZoomCar India Pvt Ltd.
M&M is keen to grow its presence in shared mobility space and by acquisition of stake in Meru, the company will enter in the corporate shared mobility space which is an area of strategic interest to the company.