Maruti Udyog says to buy out, merge subsidiary

New Delhi, Apr 13 (UNI) India's biggest car company, Maruti Udyog Ltd (MUL), today said it will buy Suzuki's entire stake in Maruti Suzuki Automobile India Ltd (MSAIL) and merge the subsidiary with itself.

''The Company will buy out the entire 30 per cent stake held by Suzuki Motor Corporation (SMC) in MSAIL,'' the company said in a statement.

Maruti holds 70 per cent stake in MSAIL while SMC, Japan, holds the remaining 30 per cent.

The details of the deal were not disclosed.

''This merger will add value for shareholders and eliminate all potential issues relating to inter-company transactions,'' Maruti Udyog said.

According to an agreement in September 2004, MSAIL was set up as a subsidiary to operate a new car plant in Manesar, which will initially have a capacity of 1,00,000 cars a year.

A new car plant at Manesar is coming up at an investment of Rs 1524.2 crore. The capacity is being scaled up to 2,50,000 cars per annum by 2008-09.

The new car plant will begin commercial production on schedule, by the end of 2006.

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