Mahindra & Mahindra has acquired 36.63% stake in cab-operator Meru in an all-cash deal for Rs 44.71 crore in its bid to tap the growing shared mobility space. The company plans to acquire 55% stake in multiple tranches. The investment gives the automaker the right to appoint majority of directors on Meru’s board.
On August 31, the company had said that it would acquire up to 55% stake in tranches. With this first tranche of investment, Meru and its allied companies have become subsidiaries of M&M. M&M had said in August that it would invest an amount not exceeding Rs 201 crore in Meru. The company will spend Rs 103 crore in acquiring 55% stake, while the balance amount of Rs 98 crore will be used to acquire additional stake from other investors.
The Meru acquisition is the latest in a string of investments made by M&M in the shared mobility and ride-hailing operators. The corporate shared mobility space is an area of strategic interest to the company, the company said.
The company has made investments in self-drive car rental company Zoomcar in addition to running its own e-mobility company Mahindra Glyd with e-Verito cars. With the Meru acquisition, M&M is now competing with Ola and Uber, but it has earlier helped both the cab-aggregators run a fleet of electric cars.
Meru started operations in December 2006 much before the arrival of Ola and Uber. However, only one of the subsidiaries — Meru Mobility Tech — directly operates in the territory of cab-aggregators in major cities. V-Link Automotive Services runs taxi and tourist cabs in various cities while V-Link Fleet Solutions offers transportation services to corporates. Meru’s revenue has declined 43.6% to Rs 156.6 crore in FY19 compared to Rs 277.2 crore in FY17.
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