M&M may buy Kinetic's two-wheeler manufacturing division

Mahindra & Mahindra (M&M) is, reportedly, in talks with Kinetic, with a view to acquiring the Pune-based two-wheeler manufacturing company. M&M has been interested in getting into the two-wheeler segment for the last five years, and now, rather than getting into the segment on its own, the company is exploring this acquisition route.

After it split from Honda, Kinetic has not been doing very well, despite getting into international tie-ups with SYM of Taiwan, Hyosung of Korea and Italjet of Italy. Kinetic’s pathbreaking initiatives in the Indian two-wheeler market – in the context of being the first company to explore the CBU segment with its Comet and Aquila bikes, and getting in bigger scooters like the Blaze – have not been very successful.

Things may change at Kinetic if the company is bought over by Mahindra, since the latter are certain to bring in better management skills (Kinetic remains a family-owned and managed company today.) Though both companies deny it completely, both are said to be in the final stages of due diligence. If things go through, M&M is expected to pick up a majority stake in Kinetic, for anything between Rs 80 crore to Rs 100 crore.