Mahindra & Mahindra (M&M) has said that its Board of Directors has approved the acquisition of business assets of Pune-based Kinetic Motor Company Ltd. (KMCL). The acquisition will be done through a new company to be formed. The consideration for the acquisition is a sum of Rs. 110 crores (subject to closing due diligence) plus 20 per cent stake to KMCL in the new company. M&M will hold the balance 80 per cent of the equity.

The deal will enable Mahindra to design and market a range of scooters, value engineered motorcycles and high-end motorcycles for the Indian and global markets, helping it establish a robust, end-to-end two-wheeler business in every segment of the industry. In yet another development, the Board of Directors of M&M and Punjab Tractors have unanimously approved a scheme of amalgamation of Punjab Tractors Limited (PTL) with Mahindra & Mahindra Ltd. M&M owns a majority stake in Punjab Tractors and acquired 63.33 per cent stake in PTL in July 2007. MHFL, a wholly owned subsidiary of M&M, currently holds 1.31 per cent of PTL, and is also in the process of being merged into M&M.

Under this amalgamation scheme, pursuant to provisions of Sections 391 to 394 and other relevant provisions of the Companies Act, 1956, PTL will be merged into M&M and all its assets and liabilities will be transferred to M&M at book values. Upon the scheme becoming effective, M&M will transfer all the equity shares held by it in PTL to a Trust, of which M&M is the beneficiary. M&M will issue its shares to PTL shareholders as on record date, based on the swap ratio determined by independent valuers.