ET reported that Mahindra & Mahindra is in advanced stages of talks with US based construction equipment maker Caterpillar for a 51:49 JV, which will make engines for the US firm’s tractor range.

The report quoted a person with knowledge of the negotiations as saying that “The discussions could also cover Caterpillar’s remanufacturing business that refurbishes and restores used machinery and technologies to their original condition and specifications.”

Mr Pawan Goenka president of M&M automotive division said that “Normally, we do not comment on a potential joint venture.”

Mr Jim Dugan chief corporate spokesperson of Caterpillar’s said “As a large global company, Caterpillar is regularly discussing a variety of business opportunities with other companies around the world. As a matter of policy, we do not respond to specific rumors or speculation.”

As per report, a JV will make great business sense for both companies. For M&M, which already has engine making capabilities, this would be a contiguous business. A JV will help it gain scale as well as a foothold in several overseas markets. For Caterpillar, a venture with M&M will offer it a great cost advantage globally. Caterpillar bought Hindustan Motors’ earth moving division almost a decade ago to form Caterpillar India.

(Sourced from Economic Times)