Mahindra Opts Out Of Aston Martin Race?

Published: Thursday, December 6, 2012, 11:48 [IST]

Mahindra & Mahindra, the leading Indian SUV manufacturer appears to be losing interest in buying a stake in British sports carmaker Aston Martin. Reports say Mahindra's top management team that was negotiating with Aston Martin and its owner Investment Dar has already moved out of London.

Mahindra had indicated it had a huge interest in owning a stake in Aston Martin but the deal seems to have fizzled out due to the poor financial state of the sports car brand and its promoters. Another reason for Mahindra not continuing talks to buy Aston Martin is due to the ongoing financial restructuring of Investment Dar.

Mahindra and European private equity fund Investindustrial were competing with each other to buy Aston Martin. Now with the Indian firm moving out of the race, Aston Martin will only have one suitor to contend with.

This is not the first time Mahindra has attempted to buy a hugely popular international automotive brand. Mahindra & Mahindra was also in the race to buy Jaguar and Land Rover from Ford in 2008. Tata Motors emerged as the winning bidder then and the Indian firm is now reaping the benefits.

Mahindra, on the contrary, analysts say would not benefit much from buying Aston Martin. While Tata Motors is able to use the technology developed for Land Rover in some of its SUVs, Mahindra and Aston Martin have such a huge gap in terms of technology that Mahindra would not be able to extract synergies anything from the sports car brand.

It appears that Mahindra has taken the prudent decision of not buying a brand that will only be just a show piece but also drain cash.