Indian carmaker signs preliminary deal to buy Ssangyong

SEOUL, August 23, 2010 (AFP) – India’s leading sports utility vehicle maker Mahindra and Mahindra signed a preliminary agreement Monday to take over bankrupt South Korean carmaker Ssangyong Motor, Ssangyong said. Ssangyong announced the signing of the memorandum of understanding in a regulatory filing to the Seoul stock exchange, but no figures for the deal have been disclosed.

“We give the takeover candidate (Mahindra and Mahindra) an exclusive right for negotiation, and won’t be involved in any takeover-related activities with a third party,” the company said.

Ssangyong’s creditors had said on August 12 they had chosen Mahindra and Mahindra as the preferred bidder to take over a controlling stake in the ailing South Korean carmaker.

The creditors have not said how much Mahindra has bid but analysts said the cost of more than 50 percent of Ssangyong would be up to 500 billion won (418 million dollars).

Mahindra vice-chairman and managing director Anand Mahindra said earlier this month that the tie-up — the largest investment by an Indian company in South Korea — would “create a platform for global expansion” and create an “Asia-focused SUV player”.

Ssangyong was granted court p