Indian automaker Mahindra & Mahindra has begun a takeover approach for troubled Korean carmaker SsangYong.
The Indian company, which only recently bought a majority stake in electric vehicle manufacturer Reva, confirmed that it has submitted a letter of intent to bid for SsangYong.
"We have submitted an expression of interest for Ssangyong. If we are one of the companies shortlisted, then we will undertake a due diligence," Pawan Goenka, president of Mahindra's automotive sector told reporters.
"We have to look at the economic viability of the company and how it fits into our strategy before we make a bid," Goenka said.
When asked to put a value to the deal, he said Mahindra had just expressed an intent to make a bid for Ssangyong. "Just because we have expressed an interest does not mean we will finally make a bid," Goenka said.
"We will do it only if it makes economic sense," said Bharat Doshi, Mahindra's group chief financial officer.
Goenka said Mahindra would have to examine the reasons why Ssangyong sales have fallen and "whether they can be fixed."
"We have an expertise in utility vehicles and that should help us in this," Goenka said.
South Korean media put the deal at $300 million-$500 million, but analysts said Mahindra was more likely to bid in the range of $100 million to $300 million to recapitalize Ssangyong, which was forced to undergo a capital writedown last year.