M&M to Merge Mahindra First Choice with TVS Automobile in a Share Swap Deal

Mahindra & Mahindra Ltd. (M&M) announces a share swap deal with TVS Automobile Solutions Pvt. Ltd. to merge Mahindra First Choice Services Ltd. with TASL. As a part of the deal, Mahindra Group would pick up a minority stake of 2.76 percent in the TVS Group’s TASL, a multi-brand automobile aftermarket and related services firm, for Rs.35 crore.

On the other hand, TASL will acquire the entire stake of Mahindra Holdings Ltd., which is a wholly-owned subsidiary of M&M, in Mahindra First Choice Services Ltd. and its subsidiary Auto Digitech Pvt. Ltd. “Mahindra Holdings Limited is diverting its entire stake held in Mahindra First Choice Services Limited and its subsidiary Auto Digitech Private Limited to TASL, which houses ‘myTVS’, a multi-brand independent automobile aftermarket player that offers integrated solutions across the aftermarket value chain,” said the company in a regulatory filing.

The deal will be effective once ratified by the Competition Commission of India. M&M expects the transaction to be completed by February 28, 2021.

The Mumbai-based M&M has been restructuring its loss-making businesses. And selling the existing auto after-market business is more likely to be a part of this strategy. Mahindra Group President, Mobility Services Sector V S Parthasarathy said, “I believe that consolidation, scale and phygital solutions will drive the next phase of growth for the company (MFCS) as well as the industry. I am confident that a strong partner like TVS ASPL will help take our legacy further and propel the company to the next orbit”.

R Dinesh, TVS Automobile Solutions Pvt. Ltd. said that India’s aftermarket segment, which is nearly $10 billion, is fragmented and needs strong support for relevant and growth amid changing technology landscape in the automotive sector. He added, “We would take this opportunity to bring thousands of entrepreneurs into a digital platform wherein they can get benefited from digital technologies across marketing, diagnostics, customer experience, quality parts, access to training and digital payments. I am sure this partnership will be a win-win proposition for all the stakeholders.”