India's Mahindra & Mahindra eyes global stage, races for Aston Martin

Nov 29 2012, 13:02 IST
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SummarySports car maker Aston Martin may look like a shiny trophy that makes an awkward fit for Anand Mahindra-led Mahindra and Mahindra (M&M)...

Sports car maker Aston Martin may look like a shiny trophy that makes an awkward fit for Anand Mahindra-led Mahindra and Mahindra (M&M), the world's biggest tractor maker, but it would help the Indian group realise a long-standing ambition to be a global player.

Despite its efforts, Mahindra has had a hard time building a presence outside India, where its boxy jeeps and trucks are the top sellers in the utility market.

"He wants to get those iconic brands to raise the group's profile in the international market," said the Mumbai-based M&A head at a U.S. bank who has worked with the group.

"He" is Anand Mahindra, the 57-year-old group chairman and grandson of its co-founder, who has turned the diversified Mahindra group into a $15 billion Indian powerhouse, partly through deals, but has been unable to replicate that success overseas.

Mahindra is the front-runner for as much as half of Aston Martin, the barely profitable 99-year-old maker of British luxury cars made famous in James Bond movies, sources said.

Investment Dar of Kuwait, which led an acquisition of Aston Martin from Ford Motor Co in 2007, denied on Sunday that it was reviewing two bids for 50 percent after sources said Mahindra had outbid Italy's InvestIndustrial.

Mahindra's offer for up to half of the company is unlikely to top $400 million, and a deal could be sealed as soon as this week, one person with direct knowledge of the matter said.

For Aston Martin, Mahindra would bring deep pockets and global ambition that could help the British firm expand beyond the 4,200 cars it sold in 2011. As significant, though, is what it fails to bring to the table: relevant technology, marketing savvy and a distribution network.

For Mahindra, Aston Martin would add an iconic and under-exploited brand without stretching its balance sheet, giving it another toehold into the global market.

As part of a strategy to raise its profile overseas, Mahindra last year paid $460 million for South Korea's money-losing Ssangyong Motor Co. That deal was seen as a more natural fit, since both companies are SUV specialists.

While the company has managed to crack the lucrative U.S. market with tractors, it has not with cars, recently scrapping a six-year push to sell a pickup truck there. Of Mahindra's own-branded passenger vehicles, just 7 percent are sold abroad.

"With Aston Martin, entering the U.S. market, the customer is likely to look at you much more seriously as compared to

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