M and M Closes in on Buying Electric Car Maker Reva?

Amid speculation that it is likely to sign a deal in a day or two to take over electric car maker Reva, Mahindra and Mahindra’s shares fell 2.48 per cent on the Bombay Stock Exchange. The two companies may sign an agreement in a day or two and an announcement could be made thereafter.

While the value of the deal could not be ascertained, it is estimated that it could be around Rs 450 Crore (USD 100 million). While M and M may take over the management control of the Bangalore-based electric car maker, it would like to retain the “executive” services of Reva’s Deputy Chairman and Chief Technology Officer Chetan Maini.

However, when a Mahindra and Mahindra spokesperson was contacted, he said: “Please note that as a matter of company policy we do not comment on speculation.” M and M shares slipped 2.48 per cent to Rs 516.15 on BSE. Repeated calls and SMS sent to Maini remained unanswered. He had, however, last month dismissed reports about M and M picking up stake in the company as "speculation".

Earlier in April, Reva had said that it was open to undertaking contract manufacturing for other companies, besides General Motors (GM) with which it has a tie-up for making the electric ‘Spark’. Reva and GM had last year announced to produce the electric Spark and the prototype was showcased in January.

Maini had said the cars will be ready by this year and the commercial production is likely to start sometime next year at GM’s facility. Reva Electric Car Company is a joint venture between Maini Group and US-based AEV LLC. It is also funded by Global Environment Fund and Draper Fisher Jurvetson.