M&M to buy 55% stake in Meru for Rs 201.5 cr

Mahindra & Mahindra is buying 55% stake in ride hailing and radio taxi operator Meru Travel Solutions for a cash consideration of up to Rs 201.5 crore.

The company signed a share subscription and shareholder agreement on Saturday for subscribing up to 55% of equity share capital of Meru Travel Solutions Pvt Ltd in tranches, Mahindra & Mahindra said in a BSE filing.

After investment of the first tranche in Meru, M&M will have the right to appoint majority of the directors on the board of Meru and will control 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.

M&M will make a primary investment of an amount not exceeding Rs 103.5 crore for a stake of up to 55% in Meru in tranches.

The agreement also envisages M&M to have the right of call option to acquire shares from certain existing investors of Meru and these existing investors of Meru would have put option to sell shares for an amount not exceeding Rs 98 crore, it said.

Meru, which was incorporated in December 2006, had clocked consolidated revenue of Rs 156.6 crore in 2018-19, Rs 189.9 crore in 2017-18 and Rs 277.2 crore in 2016-17.