Maruti Suzuki India Ltd has announced the acquisition of Japan’s Sumitomo Corporation’s stake in their joint venture JJ Impex (Delhi) Pvt. Ltd, a company engaged in automobile service and repair business.
Maruti said in a stock-exchange filing that its board has approved a 49.13% equity stake acquisition of JJ Impex from two Sumitomo firms – Sumitomo Corporation and Sumitomo Corporation India Pvt. Ltd.
The transaction involves the automobile manufacturing company picking up over 34.43 lakh shares from Sumitomo Corp., and 8.8 lakh shares from its Indian arm.
The total cost of the acquisition is Rs 21.73 crore (approximately $2.87 million at current exchange rates), it said.
Following the acquisition, JJ Impex shall become a wholly-owned subsidiary of Maruti Suzuki India. The firm shall also have the right to nominate and appoint all directors on the board of the company.
The company said it expects the acquisition to be completed within six months.
The move will help Maruti strengthen its customer approach concerning service repairs and maintenance, the filing added.
According to VCCEdge, the data research arm of Mosaic Digital, JJ Impex reported net sales of Rs 87.39 crore and Rs 84.79 crore for the 2019 and 2018 financial years. It also reported EBITDA (earnings before interest, taxes, depreciation and amortisation) figures of Rs 6.69 crore and Rs 4.08 crore for the same period.
The company provides its services under the Maruti Service Masters brand name. Some of its product portfolios include annual maintenance service, body and paint repairs, accident repairs and accessory sales.
Shares of Maruti Suzuki were trading 2.05% down at Rs 5,005.20 apiece at the time of writing this report. The company’s stock has had a 52-week high of Rs 7,755 and a corresponding low of Rs 4,002.
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