Mahindra will have three representatives on the board of Peugeot Scooters, which will continue to be led by the existing leadership team.MUMBAI: Mahindra Two Wheelers Ltd, a closely-held outfit of the $16.5 billion Mahindra Group, is buying controlling stake of 51% in Peugeot Scooters, the world's oldest maker of motorized two-wheelers from France's PSA Group, for Euro 28 million, which will give the Indian firm access to European technology to boost its business. This is Mahindra Group's second acquisition in the two-wheeler space. It entered the scooters business through acquisition of Kinetic Motor in 2008. To be completed in three months, the Peugeot Scooters transaction, subject to regulatory approvals, involves Mahindra Two Wheelers, in which marquee private equity fund Samena Capital holds a little over 10% stake, infusing Euro 15 million in the loss-making Paris-based company and purchasing shares worth Euro 13 million from PSA.
Mahindra will have three representatives on the board of Peugeot Scooters, which will continue to be led by the existing leadership team. PSA will remain an active partner in Peugeot Scooters and as per the arrangement, the Euro 54 billion group wouldn't exit the business for a certain period, said Mahindra executive director Pawan Goenka at a press conference. "Mahindra will not restructure Peugeot Scooters for two years but will look to turn around the business, focusing on growing volumes." Peugeot, which traces its origins to 1898, has been in the red for 10 years and has been struggling to compete with Italy's Piaggio, the No.1 in Europe. Peugeot's plant in Mandeure, France, employs 500 people and its facility in Jinan, China, a joint venture with Qinji, has 300 staff.
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