India's Mahindra & Mahindra will buy BAE Systems' stake in the joint venture Defence Land Systems, the two companies said yesterday.
"This decision is a reflection of the shareholders' belief that they can best meet emerging customer requirements and address the opportunities in this dynamic market with a flexible, tailored approach that was not easily facilitated by the structure of the existing joint venture entity," they said in a joint statement, without specifying details of the stake purchase.
Mahindra and BAE Systems will consider opportunities for working together on specific projects, they added.
Defence Land Systems makes military vehicles at a facility on the outskirts of New Delhi.
The joint venture was formed in 2009, with Mahindra & Mahindra holding a 74 per cent share and BAE Systems holding 26 per cent.
The partners had said last month that they were reviewing the joint venture.
"Both shareholders recognise that significant evolution has occurred in the Indian Land Systems market.
"Developments in both the industry environment and in customer procurement frameworks and acquisition strategies have led the shareholders to institute a strategic review of the business," Mahindra said last month in a statement.
"This review will assess any changes necessary to address the evolving market and to meet emerging customerrequirements."
Mahindra also has a joint venture with United States-based Telephonics, a unit of Griffon, to make radar systems in India, and another with UAE-based Arabia Holdings and Ras Al Khaimah Transport Investments to make and sell armoured vehicles in the Middle East and Central Asia as well as in Africa.
The Mumbai-based multinational has an annual turnover of about US$15.9 billion (Dh58.4bn), and employs more than 155,000 people in more than 100 countries, according to information posted on its website.
It has interests in aerospace, vehicle manufacture, defence, energy, industrial equipment, property and other sectors.
* with Dow Jones