Sajjan Jindal-led JSW Group has entered into a joint venture agreement with SAIC Motor, a global Fortune 500 company, to buy out 35 per cent stake in the latter’s India venture for an undisclosed amount.

The deal will pave the way for long-standing ambition of JSW Group to enter the highly-competitive automobile business.

The Shareholder Agreement and Share Purchase & Share Subscription agreement were signed by both the companies in London.

According to sources, the deal was delayed as MG Motor India was seeking a valuation of about ₹8,000-8,500 crore, while JSW Group was keen on picking up the stake for ₹5,000-6,000 crore.

However, the final negotiated price of the deal was not immediately known, he added.

The deal will accelerate the transformation and growth of MG Motor in India.

Strategic synergies

SAIC Motor and JSW Group will create strategic synergies by bringing together resources in the field of automobiles and new technology.

The joint venture will also undertake multiple new initiatives including augmenting local sourcing, improving charging infrastructure, expansion of production capacity and introducing a broader range of vehicles with a focus on green mobility.

SAIC will continue supporting the joint venture with advanced technology and products to deliver mobility solutions with a focus on the Indian consumer.

Scion of JSW Group, Parth Jindal said the strategic collaboration with SAIC Motor aims to grow and transform the MG Motor operations in India with a focus on green mobility solutions.

The joint venture will bring world-class technology-enabled futuristics suite of automobile products including the new generation of intelligent connected NEVs and ICE vehicles, he said.

The JV’s focus on broader localisation initiatives will yield financially-accretive synergies through economies of scale, while providing the highest level of customer service to the Indian consumer.

Key focus area

One of the key focus areas of this joint venture will be to pursue the development of the EV ecosystem and to take a leadership position in this space, he added.

The joint venture will optimise SAIC Motor’s vast automotive experience and technical expertise.

It will also leverage the large presence of JSW Group across B2B and B2C sectors of the Indian economy to augment local sourcing and establish a robust supply chain.

Together, SAIC and JSW Group will work towards creating a smart and sustainable automotive ecosystem in India by bolstering the development of NEVs and ICEs with Carbon Neutrality, Sustainability and Green Mobility at the centre of its shared vision.

Both JV partners are committed to continue staying invested in the Indian market with a vision towards achieving sustainable growth.

Wang Xiaoqiu, President, SAIC Motor, said the automobile business is a global industry, and like in any other similar industry, access and collaboration are crucial for its healthy growth.

SAIC has always adhered to the ‘win-win cooperation’ approach while steadily improving core capabilities and expanding scale of production and sales, he said.

In the growing Indian automotive market, both partners shall work closely to bring in the best of innovation, in creating greener and smarter mobility products, he added.