Maruti Suzuki gets nod to merge SPIL with itself

Maruti Suzuki India (MSIL) has received its board’s approval to merge Suzuki Powertrain India (SPIL) with itself.  Following the merger, MSIL will be able to bring its entire diesel engine capacity under a single management control. All key initiative to strengthen the business, including sourcing, localization, production planning, manufacturing flexibility and cost reduction can be controlled, monitored and improved by the MSIL management.

SPIL, which supplies diesel engine as well as transmissions for vehicles to MSIL, is a subsidiary of Suzuki Motor Corporation (SMC), Japan. SMC hold a 70% stake in SPIL and the remaining 30% is held by MSIL.

The proposed merger will also benefits for the combined entity through synergies in areas like finance, capital structuring and administration and consequent reduction of transaction costs.