K.C. Mahindra had been sent to the United States of America as Chairman of the India Supply Mission in 1944. During his trip, he met with Barney Roos – inventor of the jeep – who provided him with a flash of inspiration. Swift action followed his thoughts, and when he returned home to India, along with his brother, he ended up joining hands with a distinguished gentleman named Ghulam Mohammed.

On October 2nd 1945, Mahindra & Mohammed was set up as a franchise and began assembling Jeeps from Willys, USA. Two years later, India became an independent nation, and Mahindra & Mohammed changed its name to Mahindra & Mahindra because Mohammed left after the partition – to become the first Finance Minister of Pakistan. Not many people have heard this intriguing story – one that’s definitely worth mentioning.

Mahindra is now worth a hefty $7.1 billion (`33,000 crores), and the company employs over 100,000 people across the globe. It enjoys a leadership position in utility vehicles, tractors and information technology – with a significant and growing presence in financial services, tourism, infrastructure development, trade and logistics. It’s considered to be one of the most reputable Indian industrial houses. But, despite its multiple successes at home, the Mahindra group has been struggling to gain a significant stronghold in the global automobile industry – notwithstanding the fact that the company started out as a major utility vehicle exporter.

The company has been exploring various ways to breach the international market, and build their brand worldwide. In an attempt to gain a global foothold, the company set its eyes on troubled British car manufacturer, Jaguar Land Rover, in 2008 – but lost out to fellow Indian manufacturer, Tata Motors. Mahindra also tried out a partnership with Renault, but that ended prematurely as well – with Mahindra recently buying out the venture.

Another bitter moment for the company occurred in June this year when M&M was sued by its US distributor, Global Vehicles, because of the continuous delays in the launch of its vehicles in the United States. The Georgia based dealer asked an Atlanta District Court to prohibit Mahindra from initiating sales in the United States through any other distributor. Based on a 2006 agreement between the two parties, Global Vehicles stated that it invested more than $30 million (`140 crores), and also signed 360 dealers throughout the US – who themselves are stated to have collectively invested up to twice that amount in preparation for the launch of the Scorpio pick-up.

Global Vehicles said in its lawsuit that Mahindra engaged in protracted contract negotiations for services relating to emission tests prescribed by the US Environmental Protection Agency (EPA) – a process that should not have taken longer than three years. However, just last month, the pick-up trucks finally received EPA certification, which means that Mahindra can start selling the Scorpio by the end of the year. Even though the litigation process is still underway and relations are bitter, Global Voices sent out a statement saying, “Our dealers are excited as well. This is great news.”

On the home front, Mahindra has successfully executed a number of successful takeovers and acquisitions, such as REVA Electric, Kinetic, and Satyam. While these acquisitions could position the Group very competitively – especially as the future turns towards electric mobility – M&M now appears to be well and truly standing on the accelerator pedal. It seems that for Mahindra to fulfill its dream of becoming a strong player in the global auto industry, it will need some heavy artillery. And this kind of weaponry may come in the form of ‘two dragons.’ Last month, M&M emerged as the preferred bidder for the acquisition of a majority stake in South Korean SUV maker, Ssangyong Motor Company (SYMC).

M&M beat five other bidders, including old partners Renault, and, if all goes well, this deal will be the largest investment by an Indian company in South Korea. Ssangyong, by the way, means twin dragons. The company was initially formed in 1963 under the name Ha Dong-hwan Motor Co. In 1986, the company was taken over by the Ssangyong Business Group, and therefore became Ssangyong Motor Company (SYMC). In 1988, it developed a compact 4WD SUV, which was the first SUV manufactured in Korea. Since then, it’s established a reputation for innovation, leadership, and quality in the SUV field in Korea – having recorded 1.3 million SUV sales from 1990 to 2009. It has a recognized brand, and presence, in Europe, Russia, South America, the Middle East, Africa and Asia.

The history of SYMC is not so different from that of M&M. Both companies started out exporting army jeeps, and engaged in the practice of manufacturing utility and commercial vehicles. SYMC had also taken over UK based specialty car maker Panther Westwinds in 1987, and started a technology partnership with Daimler-Benz in 1991. The partnership with Daimler-Benz did wonders for SYMC, and the technical affiliation embraced light commercial vehicles, diesel engines, luxury passenger cars, and gasoline engines. Through the technical and management innovations, and the distribution channels that grew out of this alliance, SYMC gained the technological competence to develop vehicles employing advanced technologies – and was able to launch them in international markets, which is exactly what M&M is trying to do today. SYMC, however, ran into trouble in the 1998 economic collapse in Asia, and was taken over by Daewoo for three years – after which it was sold again in 2000. In 2004, Chinese car makers SAIC bought a 51% stake in SYMC, but the companies had various issues and SYMC eventually went bankrupt after last year’s economic downturn. Sales of its vehicles, however, are currently back on the upswing, and operating losses have been largely curtailed.

If M&M successfully acquires SYMC, the two manufacturers will have a lot to hope for in the future, as both companies will likely benefit from one another. M&M will have the opportunity to accelerate their plans of becoming a global entity in utility vehicles. There are obvious synergies that exist in the product lineups and expertise of both companies. And M&M can capitalize on the South Korean’s expansive network spread across 1,200 dealers in 98 countries. The wide sales and distribution networks, and complementary product lines, will not only provide access to many overseas markets for Mahindra, but there’s also an opportunity to introduce a portfolio of premium SUVs in the Indian market – providing a new growth avenue for Ssangyong, and further strengthening Mahindra’s dominant position in India.

M&M signed an MoU with SYMC on August 23rd, and had to deposit 5% of the total bid value. This will be followed by an actual inspection of the manufacturing facilities in September, confirmation of the valuation, and the actual singing of the formal contract in November. The decision by SYMC to choose M&M was made based on the submitted bid, which consists of various details regarding the total investment – such as the amount of paid-in capital, the amount of cash to purchase company bonds, the certainty of financing plans, the enthusiasm and capability of managing and developing the company, the management plans after taking over the company, and a guarantee for maintaining existing employees and collective agreements. It has already been stated by M&M that SYMC will operate as a separate company, with a separate identity, and with a local management team.

Considering the extensive bid document, the deal should progress smoothly from here on. M&M may finally be able to get a stronghold in the global market, which they’ve so desperately been seeking.

They will also be able to get access to an R&D manpower strength of around 600 people, as well as modern R&D infrastructure for design, testing and validation, which SYMC already has up and running.

“Korea is one of the world’s leading centers of automotive excellence, and Ssangyong brings with it a rich legacy of R&D and innovation. Mahindra and Ssangyong will create synergy, which will make us significant global players,” said Anand Mahindra, Vice Chairman and Managing Director of the Mahindra Group. This strategic acquisition, when concluded, will certainly make Mahindra and SYMC a force to reckon with in the global SUV space.