The Competition Commission of India (CCI) on Monday approved Mahindra & Mahindra's acquisition of majority stake in a subsidiary of Ford Motor Company, which will form a joint venture in the country.
The CCI, in a tweet, said it has approved "formation of JV between Mahindra & Mahindra and Ford Motor and transfer of automotive business of Ford India to the JV".
@CCI_India approves formation of JV between Mahindra & Mahindra and Ford Motor and transfer of automotive business of Ford India to the JV- CCI (@CCI_India) February 10, 2020
In October last year, Mahindra & Mahindra and US-based Ford Motor Company had signed a definitive agreement to create a joint venture in India valued at $275 million (Rs 1,925 crore).
In the joint venture (JV), Mahindra will hold 51 per cent controlling stake while Ford will have the remaining stake of 49 per cent. The new venture would acquire the automotive business of Ford India Pvt Ltd (FIPL), a wholly-owned subsidiary of Ford Motor Co.
The JV will be operationally managed by Mahindra, and its governance will be equally composed of representatives from Mahindra and Ford. The entity will develop, market and distribute Ford-branded vehicles in India.
Under the deal, Ford will transfer its India operations to the joint venture, including its personnel and assembly plants in Chennai and Sanand. The American automaker will retain the Ford engine plant operations in Sanand as well as the Global Business Services unit, Ford Credit and Ford Smart Mobility.
The JV will be responsible for growing the Ford brand in India and exporting its products to Ford entities globally. Ford will continue to own the Ford brand, and its branded vehicles will be distributed through the current Ford India dealer network. Mahindra will continue to own the Mahindra brand and operate its own independent dealer network in India.
By Chitranjan Kumar with PTI inputs