Tata Motors on Thursday said it will buy the 49 percent stake held by its Brazilian partner Marcopolo in their bus-making joint venture Tata Marcopolo Motors Ltd (TMML) for Rs 100 crore in all cash deal. Post the acquisition, TMML will become a wholly-owned subsidiary of Tata Motors, the auto major said in a regulatory filing.
Tata Marcopolo Motors is a 51:49 JV formed in 2006 between Tata Motors and Brazil-based Marcopolo S.A., one of the largest bus and coach manufacturers globally.
"The company and Marcopolo S.A. have entered into a share purchase agreement where the Company will purchase the balance 49 per cent shareholding in TMML for a cash consideration of Rs 99.96 crore," Tata Motors said in a filing to the BSE.
Tata Motors will purchase 8.33 crore shares of face value Rs 10 each, representing 49 per cent of the paid up equity share capital of Tata Marcopolo Motors, from the JV partner Marcopolo S.A for Rs 99.96 crore.
The proposed acquisition would be completed by February 28, 2021, the company said.
After a successful venture in India, and as a consequence of its refreshed business strategy, Marcopolo S.A has decided to exit from the JV and offered to sell its 49 per cent shareholding in the JV to the company, Tata Motors said.
Post the purchase, all technologies pertaining to existing bus body products manufactured will continue to vest with TMML, it added.
In addition as part of the transition, Marcopolo S.A. will continue to license the "Marcopolo" trademarks to TMML for a minimum of 3 years with a non-compete provision in India for a corresponding period.
"The transaction will not result in any impact on TMML's operations or the continued sales and service of the Company's customers. The company, Marcopolo S.A. and TMML intend to maintain an open channel for future collaboration opportunities around bus body designs and technical consulting services," Tata Motors said.
Tata Marcopolo Motors was one of the first to introduce low-floor passenger buses for public transportation in Delhi, Mumbai and other cities. It has manufacturing facilities in Dharwad and Lucknow where it builds bus bodies on chassis supplied by the Company and marketed by the Tata Motors under the "Starbus" and "Starbus Ultra" bus brands.
By Chitranjan Kumar