India's top utility vehicle and tractor maker, Mahindra & Mahindra, is considering bidding for South Korea's Ssangyong Motor (003620.KS), sources with knowledge of the development said, in a deal reportedly worth up to $500 million.
Ssangyong, 10 percent owned by China's SAIC Motor Corp, has been in court-led restructuring since early 2009, hammered by one of the industry's worst downturns, and is looking for a buyer to stay afloat with fresh capital.
A Seoul court kicked off the sale process this week and set the May 28 deadline for a letter of intent.
A Ssangyong official said Mahindra was known to have informally expressed interest in the troubled carmaker even before the formal process started.
But a second source said the Indian firm has yet to take a decision on whether to submit a letter of intent and was still reviewing its potential proposal.
Mahindra, which has been looking for acquisitions since it lost out to larger rival Tata Motors (TAMO.BO) to buy Jaguar Land Rover in 2008, has been looking for acquisitions to expand its portfolio and get access to new markets, declined to comment.
A deal with Ssangyong, which makes Rexton and Kyron SUVs and Chairman sedan, will be a good fit for Mahindra, which plans to launch a pick-up truck in the United States and aims to introduce an SUV later this year.
Mahindra is the sole overseas bidder for Ssangyong, and media reports said two-to-three small South Korean manufacturers and investment firms are also interested.
An official involved in the sale process in Seoul said Mahindra had not directly contacted the sellers, and other potential bidders have yet to express interest.
