Maruti Suzuki will issue equity shares to Suzuki Motor Corporation on a preferential allotment basis prior to the company’s acquisition of Suzuki Motor Gujarat Private Limited (SMG), the company announced in its stock filing on Tuesday.
The issuance of equity shares to the SMC was approved on Tuesday by the board of Maruti Suzuki. The corporation stated that the choice would be subject to any necessary statutory and regulatory approvals. SMG will join Maruti Suzuki as a fully owned subsidiary following the acquisition. At 11:16 on Wednesday, Maruti Suzuki shares were up 0.63% at ₹9575.70 per share on the BSE.
“The Board of Directors approved the issuance of equity shares of the firm to Suzuki Motor Corporation (SMC) on a preferential basis at its meeting today in exchange for SMC acquiring a 100% shareholding in Suzuki Motor Gujarat Private Limited (SMG). This is pending the necessary shareholder approval as well as any necessary regulatory and legislative approvals. SMG will become a wholly owned subsidiary of the company following such an acquisition,” the company stated in its public filing.
The termination of the contract manufacturing agreement (CMA) with Suzuki Motor Gujarat Private (SMG) Limited and the purchase of SMG shares from Suzuki Motor Corporation (SMC) were both approved by the Maruti Suzuki board on July 31.
The first alternative considered by the board was payment in cash, while the second was the issuance of MSIL equity shares on a preferential allotment basis. Up until 2031, the effects of both choices on MSIL’s revenue were calculated.
The board only decided that acquiring SMG shares by issuing Maruti Suzuki equity shares to SMC could profit minority shareholders and Maruti Suzuki after carefully weighing all the factors.
