The board of Maruti Suzuki India (MSI) has given its nod to acquire 100% stake in Suzuki Motor Corporation's Suzuki Motor Gujarat (SMG), the company told the exchange houses, on August 8.

“The Board of Directors, at its meeting held today, has approved issue of equity shares of the company on preferential allotment basis to Suzuki Motor Corporation (SMC), as consideration for the acquisition of 100% stake of SMC in Suzuki Motor Gujarat Private Limited (SMG). This will be subject to applicable regulatory and statutory approval(s), as may be required, including requisite approval of shareholders. Post such acquisition, SMG will become a wholly owned subsidiary of the Company," said the company in its stock filing. 

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The board further said that the issue of MSI equity shares on a preferential allotment basis would be beneficial to minority shareholders and the company. The other option in consideration was cash payment.

The equity deal once complete will make SMG a wholly-owned subsidiary of Maruti Suzuki India. "The total number of securities proposed to be issued to SMC as consideration for the acquisition of 100 percent stake of SMC in SMG, shall be decided in a subsequent Board Meeting, based on relevant valuation reports," the filing said.

The company said that the decision would be subject to applicable regulatory and statutory approvals, as may be required.

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Other details like subscription, including the issue price for the securities and the post-allotment holding of the investors are yet to be decided. 

The shares of Maruti Suzuki India were trading 0.56% higher at Rs 9,576 against its previous close at Rs 9,523 at 1:31 PM IST at NSE.