The Mumbai bench of the National Company Law Tribunal (NCLT) has approved the merger of Mahindra Electric Mobility with Mahindra & Mahindra.
The proposed consolidation will bring the entire automotive value chain of the Anand Mahindra-led group under one umbrella, amid an increasing focus on electric vehicles (EVs).
“From the material on record, the scheme appears to be fair and reasonable and is not in violation of any provisions of law and is not contrary to public policy,” the division bench of Justice PN Deshmukh and technical member Shyam Babu Gautam said in a 14-page order, dated January 13.
Before the tribunal’s order, advocates Hemant Sethi and Devanshi Sethi, appearing for the Mahindra Group, argued that the company envisaged significant investments in the EV business to scale up the operations and develop a robust EV product pipeline for which the proposed consolidation would be critical.
The companies also argued that M&M’s better credit rating would provide significant savings in finance costs for funding the investment.
The companies while seeking the tribunal’s nod for the merger argued that Mahindra Electric Mobility (MEML) has expertise in Electric Vehicle technology while Mahindra & Mahindra (M&M) has expertise in automotive design, engineering and manufacturing, sourcing network and sales & marketing and this consolidation will bring this entire value chain under one umbrella.
As per the company’s website, Mahindra Electric Mobility manufactures all-electric passenger and cargo van e-Supro, sedans under the eVarito brand and three-wheelers such as the Treo and e-Alfa Mini among others.
From the group’s perspective, the merger could lead to increased innovation and research and development capabilities by leveraging the combined resources and expertise of both companies, said Ankita Singh, founder of boutique law firm Sarvaank Associates. “From the industry’s perspective, the merger could lead to increased competition and innovation in the electric vehicle market, as well as potentially helping to drive down the cost of electric vehicles.”
Source: Economic Times