Tata Motors will buy out its Brazilian partner Marcopolo S.A in bus joint venture Tata Marcopolo Motors Limited (TMML), in an all-cash deal worth ₹99.96 crore.
Post the purchase, TMML will become a wholly-owned subsidiary of Tata Motors, the company said in a regulatory filing on Thursday. Tata Marcopolo Motors Limited (TMML) is a 51:49 JV formed in 2006 between Tata Motors and Marcopolo S.A., a bus and coach manufacturer.
Tata Motors will purchase 8,33,00,000 shares of face value of ₹10 each from Marcopolo S.A. for a consideration of ₹12 per share aggregating to ₹99.96 crore, it said. The deal is expected to close by February 28, 2021.
“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% shareholding in the JV to the company. 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 ₹99.96 crore,” the company said in a statement.
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All technologies pertaining to the existing bus body products manufactured will continue to vest with TMML. In addition, as part of the transition, Marcopolo S.A. will continue to license the “Marcopolo” trademarks to TMML for a minimum of three years with a non-compete provision in India for a corresponding period, the statement said.
Provides future collaboration opportunities
The transaction will not result in any impact on TMML’s operations or the continued sales and service of the company’s customers, it added. Tata Motors, Marcopolo S.A. and TMML intend to maintain an open channel for future collaboration opportunities around bus body designs and technical consulting services, it said.
Since its incorporation, the JV has introduced designs and concepts in the premium bus body segment in India. The JV has manufacturing facilities in Dharwad and Lucknow where it builds bus bodies on chassis supplied by the Tata Motors and marketed by the company under the “Starbus” and “Starbus Ultra” bus brands.