M&M picks up majority equity in Reva

by 26 May 2010

Mahindra & Mahindra has struck a deal to be the majority shareholder in Bangalore-based Reva

Electric Car Company. It has picked up a 55.2 percent equity stake in Reva through purchase of equity from the promoters as well as via a fresh equity infusion of Rs. 45 crore.

Post-buyout, the Reva Electric Car Company will now be known as Mahindra Reva. Dr Pawan Goenka, head of M&M’s automotive division takes over as chairman of the new board while Chetan Maini, founder of RECC, continues on the board and will in addition now assume the mantle of chief of technology and strategy.

M&M’s has initiated several projects as part of sustainable mobility, many of which are under various stages of test and implementation for the past decade. This will now get a big boost with the new acquisition. M&M will adapt Reva’s Electric Vehicle technology for the Bijlee – the electric three-wheeler and its mini truck – Maxximo - among other M&M products.

Goenka, now chairman of Mahindra REVA says, “With Mahindra’s vehicle engineering expertise, global distribution network, sourcing clout and financing support, Reva’s vehicles have the potential to significantly gain in market penetration. Mahindra will also benefit from Reva’s EV technology for its own products.”

Chetan Maini, says, “The EV market is poised to grow significantly and we concluded that in order to seize the opportunity we needed the resources and experience of a major automotive manufacturer. We found that in M&M which not only shares our vision of sustainable growth but one that also has a reputation for good corporate governance.”