| Parting ways
Mumbai, March 30: Mahindra & Mahindra and Ford India have sold the stakes they held in each other, ending speculation about the future of their relationship after the Indian auto major embraced Renault to roll out the French giant's best-seller, Logan, in India.
The Mahindras said in a letter to exchanges today that they palmed off their 15.88 stake in Ford India on Monday. There was no word on who bought it and for how much.
The unlisted Ford India sold the 59.76 lakh shares of M&M to Aranda Investments (Mauritius), a Temasek company for a total value of Rs 289 crore, at Rs 483 apiece.
'The relationship has served an important purpose for nearly a decade.
The company values its relationship with Ford, the contribution it made in bringing its international expertise in manufacturing and inculcation of quality standards in the company's workforce,' the Mahindras said in their letter to exchanges.
The two Ford India directors on the M&M board ' R. K. Pitamber and David Friedman ' resigned on Tuesday. Pitamber served as the managing director of M&M until Anand Mahindra picked up the reins of the company.
'Since the company started devoting resources to development and production of Scorpio, it viewed its stake in Ford as a portfolio investment. The association did not have any operational or competitive restrictions on either company. Thus, the divestment is a simple change in portfolios,' the letter sent by M&M said.
The stake churning sent M&M shares rising 1.6 per cent to Rs 485.20 on the BSE from Tuesday's close of Rs 477.55. In all, 61.57 lakh shares changed hands, generating unusually high volumes of around Rs 294.77 crore.
Temasek, a company owned by the Singapore government, said it snapped up the M&M shares because it remains upbeat about the prospects of the utility vehicle firm, which also is a successful tractor maker.
Manish Kejriwal, managing director of Temasek Holdings, was quoted as saying the investment firm is 'positive about the long-term growth prospects of M&M on the back of strong domestic demand of its core products'.