Mahindra & Mahindra which is a homegrown utility vehicle has now acquired 55% stake in the radio taxi and ride-hailing operator Meru Travel Solutions for a cash consideration of around INR 201.5 crore, according to a report which has been revealed.
The company has a signed a share subscription and shareholder agreement on the 31st of August for subscribing up to 55% of the equity share of the share capital of Meru Travel Solutions Pvt Ltd in tranches, Mahindra & Mahindra said in a BSE filing.
Under this new agreement, after the investment of the first tranche in Meru, M&M will now going to have the right to appoint a majority of the directors on the board of Meru and will even control all its composition, it added.
“Upon obtaining such right, Meru will become a subsidiary of the company,” M&M said, adding subsidiaries of Meru — Meru Mobility Tech Pvt Ltd, V-Link Automotive Services Pvt Ltd, and V-Link Fleet Solutions Pvt Ltd — would in turn also become subsidiaries of M&M.
The agreement also envisages M&M to have the right of a call option to acquire shares from all the existing investors as well, and these existing investors of the Meru would have put option to sell shares of an amount not exceeding INR 98 crore, it added.
Meru which was incorporated in the month of December 2006, had clocked a revenue of around INR 156.6 crore in the year 2018-2019, and INR 189.9 crore in the year 2017-2018.
Previously, Brand Capital, an investment arm of Bennett, Coleman and Co (BCCL) has invetsed 150 crore (USD 25 million) on Taxi service Meru Cabs.
In the year 2015 March, it also secured, INR 300 Cr From India Value Fund.