Maruti Suzuki India’s board (MSIL) on Tuesday (12 June) approved a proposal to merge with Suzuki Powertrain India (SPIL).

SPIL, which supplies diesel engines and transmissions to MSIL, is a subsidiary of Suzuki Motor Corporation (SMC), Japan. SMC holds a 70% share in SPIL and the remaining 30% is held by MSIL.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

Maruti said the merger would bring its entire diesel engine capacity under single management control: “All key initiatives to strengthen the business, including sourcing, localisation, production planning, manufacturing flexibility and cost reduction can be controlled, monitored and improved by the MSIL management”.

It also saw benefits from synergies in areas like finance, capital structuring and administration and a consequent reduction of transaction costs. 

There are no plans to reduce jobs following the merger.

See Also:

The merger will take place through a share swap and there will be no cash outflow from MSIL. 

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The swap ratio has been fixed at 1:70. SMC will receive one share of MSIL (of INR5 each) for every 70 shares (of INR10 each) it holds in SPIL.

MSIL will make a fresh issue of 13.17m shares to SMC in lieu of SMC’s 70% holding in SPIL. After the merger, SMC’s holding in MSIL will rise from 54.2% to 56.2%.

Maruti expects the necessary regulatory approvals and legal requirements for the merger will be completed by the end of December 2012 and will operate a single set of accounts from 1 April, 2013.