JSW Group Explores Majority Stake Acquisition in MG Motor India

Chairman and Managing Director of JSW Group of companies, Sajjan Jindal, is reportedly in discussions to acquire a majority stake in MG Motor India, according to sources familiar with the matter.

 MG Motor India, a wholly owned subsidiary of Shanghai-headquartered SAIC Motor, could see a significant ownership change if the deal materializes. The move is aimed at transforming MG Motor India into an Indian entity, with reports suggesting that Sajjan Jindal could own between 45 and 48 percent of the company.

The potential acquisition plan seeks to ensure that at least 51 percent of MG Motor India would be under Indian control, while SAIC would become a minority partner with a maximum holding of 49 percent. The remaining percentage would be held by dealers and Indian employees, giving them a stake in the company's ownership structure.

Notably, JSW Group's listed entities, JSW Steel and JSW Energy, are expected to have no involvement or exposure to this particular venture. The acquisition talks come in the wake of MG Motor's announcement in May that it intends to offer majority stakes to local Indian partners over the next 2-4 years, as part of its long-term business roadmap in the country.

As part of this potential transition, the top management and board of MG Motor India would see an increased representation of Indian professionals. The move comes at a time when the Indian government has reportedly urged Chinese smartphone makers to appoint Indian executives for their Indian operations.

In addition, the government has encouraged these companies to expand local manufacturing and engage in joint ventures with Indian businesses at the component level, along with appointing local distributors. Currently, several Chinese distributors operate in India on behalf of these companies.

MG Motor, originally a British brand, is now owned by SAIC Motor Corp, China's largest automaker. The reported acquisition plan by JSW Group signifies a significant step towards aligning MG Motor India with Indian ownership and strengthening its presence in the domestic market.

It is important to note that the discussions are ongoing, and the final outcome of the negotiations is yet to be determined.