Mahindra & Mahindra's (M&M's) board of directors have given the go-ahead for acquisition of the business assets of Pune-based Kinetic Motor Company Ltd, through a new venture.

The acquisition has been pegged at Rs 110 crore (subject to closing due diligence) along with a 20 per cent stake to Kinetic in the new company. M&M will keep the remaining 80 per cent stake.

With the deal, Mahindra can design and market, for instance, a gamut of scooters, high-end motorcycles for the Indian and global markets. This will give it presence in every segment of the industry.

"The acquisition of Kinetic's business assets is a defining moment for us as it will give us an opportunity to be present in every segment of the automobile industry. Kinetic is a strategic fit with our overall two-wheeler strategy. The strong in-house design and development competencies provided by Mahindra Engineering Services and the recent acquisition of Italian design house, Engines Engineering, coupled with Kinetic's expertise will enable us to assume a significant position in the Indian and global two-wheeler markets. I am also delighted to announce that Anoop Mathur, president designate, two-wheeler sector, will spearhead this new venture," said Anand Mahindra, vice-chairman and managing director, Mahindra Group.

Scooters will now form M&M's starting point in the market and be a vital ingredient of the company's two-wheeler product portfolio. 

There are several reasons that make scooters market attractive to Mahindra. These include a younger, more affluent customer base with a significant number of women riders and higher demand in tier-2 cities and towns.

Founded in 1970, Kinetic had introduced several new concepts that have revolutionised the two-wheeler industry. Kinetic brought the concept of personalised transport to India with the launch of the moped Luna in 1972. In 1984, it launched India's first gearless scooter. It also introduced new technologies to India including four-valve engines, electric-start on scooters and motorcycles, v- twin engines, USD forks, among others. It is also the only company to offer top-end world class bikes, Comet and Aquila, to Indian bike buffs.

Mahindra makes a wide range of vehicles including MUVs, LCVs, passenger vehicles and three wheelers. M&M offers customers over 20 models including new generation utility vehicles like the Scorpio and Bolero. Over the years, Mahindra has been steadily growing in stature as an international automotive major with a footprint in several countries across the world.