New Delhi: Mahindra and Mahindra Ltd (M&M) plans to acquire 100% stake in the ride-hailing firm Meru Cabs, buying the remaining 56.8% shares for Rs 97.69 crore from its investors and promoters, the company said in a regulatory filing late evening Friday.
The buyout of 56.8% shares would include acquisition of 44.14% shares from the private equity investor, True North and other investors for an amount of Rs 76.03 crore and the remaining 12.66% shares from the founders Neeraj Gupta and Farhat Gupta for Rs 21.63 crore.
“With this arrangement, M&M will enhance its current shareholding in Meru from 43.20% to 100%,” the company said.
With the complete acquisition of the ride-hailing company, M&M also gains control of Meru Cabs’ subsidiary companies – Meru Mobility Tech Pvt Ltd, V-Link Automotive Services Pvt Ltd and V-Link Fleet Solutions Pvt Ltd.
Gupta, who is the whole time director of Meru Cabs and its subsidiary companies – Meru Mobility Tech, V-Link Automotive Services and V-Link Fleet Solutions, will step down from his role effective immediately.
The time is right for me to pursue new interests and hand over Meru in the safe hands of the Mahindra GroupNeeraj Gupta
Pravin Shah, who had superannuated from M&M in March 2017 as the president – automotive, will replace Gupta. He will take over as the chief executive officer (CEO) of Meru Cabs and its subsidiary companies with effect from 1 May 2021, the company said in a statement.
Meanwhile, Gupta will continue as an employee at the M&M-acquired entity until 30 June, 2021.
Earlier in 2019, M&M had agreed to buy up to 55% stake in Meru Cabs for an amount of Rs 103 crore, with an option of buying the remaining 45% stake from the existing investors for up to Rs 98 crore. Founded in 2006, Meru Cabs became a significant player in the airport transfer and corporate employee transportation business in India.
The vehicle manufacturer’s move to raise its stake in Meru Cabs underlines its intent to gain further ground in the shared mobility space. The company is already an investor in the self-drive car rental platform ZoomCar India Pvt Ltd.
“Our association with Meru is built on our compelling strategy to scale our shared mobility businesses. Pravin has agreed to take this critical responsibility of the business and to develop sustainable and scalable business strategies,” said Anish Shah, managing director and chief executive officer, Mahindra Group.
“The time is right for me to pursue new interests and hand over Meru in the safe hands of the Mahindra Group,” said Gupta.