Indian truck maker Mahindra & Mahindra Ltd. plans to purchase Navistar International Corp.’s stake in the two companies’ Indian joint venture for about $33 million.
Following the proposed purchase, Mahindra Navistar Automotives Ltd. and Mahindra Navistar Engines Pvt Ltd. would become wholly owned subsidiaries of Mahindra, the two companies said in a statement.
The sale, which requires regulatory approval in India, is expected to be completed in early 2013, said the two companies, which entered into a joint-venture agreement in 2005.
“While the Indian market has not expanded as we had originally expected and industry challenges there continue in the near term, we still see promise in India going forward,” said Navistar President Troy Clarke.
“But given Navistar’s 2013 priorities, our capital and focus needs to be allocated to other business opportunities in the near term,” he said in a statement.