Mahindra acquires the Korean Ssangyong

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Just the Facts:

• Mahindra has signed the paperwork to acquire a majority stake in Ssangyong.
• Ssangyong is a Korean company that specializes in SUVs.
• Trucks are Mahindra's specialty, too; it plans to launch a diesel pickup in the U.S.

SEOUL, South Korea — India's Mahindra and Mahindra, which is preparing to launch a diesel-powered pickup in the U.S., has signed a memorandum of understanding to acquire a majority stake in Ssangyong Motor, the ailing Korean automaker.

Both companies specialize in utility vehicles but produce other models as well. Earlier this year Mahindra acquired a majority stake in Reva, an electric vehicle manufacturer.

Ssangyong previously was controlled by China's Shanghai Auto. When sales collapsed two years ago, the Korean firm was forced into court-supervised receivership.

Mahindra said it plan to retain Ssangyong's Korean management.

 Bharat Doshi, chief financial company Mahindra and Mahindra said  that any amount will be submitted to tender will be used to meet long-term debt of Ssangyong Motor Company, which amounted to the value of its debt in December,  640 million$.

Inside Line says: Mahindra may be a better strategic fit for Ssangyong than Shanghai Auto. — Anita Lienert, Correspondent