M&M to buy 80% stake in Kinetic Motor

Mahindra & Mahindra Ltd. (M&M) acquired an 80% stake worth Rs1.18 billion (US$27.4 million) in scooter maker Kinetic Motor Co. Ltd. in late July, said reports. M&M will form a new company, Mahindra Kinetic Scooters & Motorcycles Ltd., to execute the acquisition of Kinetic by purchasing all operating assets of the company, said M&M’s Chief Financial Officer Bharat Doshi. Kinetic would hold a 20% stake in the new company. Mahindra is India’s top sport utility vehicle and tractor maker by sales. Kinetic, which separated from a scooter-making venture with Honda Motor Co. in 1998, now has an alliance with Taiwan’s Sanyang Industry Co. The Taiwanese company also holds an 11.1% stake in Kinetic, the report said. (June 27/July 30, 2008)