By VIVEK RAGHUVANSHI
NEW DELHI — In a setback to joint ventures in India’s defense sector, the U.K.’s BAE Systems and domestic automobile company Mahindra & Mahindra ended their equity partnership, formed in 2009, called Mahindra Defence Systems.
BAE will forgo its share of 26 percent in Mahindra Defence Systems; no details are known on the purchase price of BAE’s share.
While an executive of Mahindra Defence Systems said its acquisition of BAE’s 26 percent stake will not end their relationship, sources in the Indian company said BAE is leaving the joint venture because it has decided the future defense market for its products was not as bright as it had earlier calculated.
In a joint statement, BAE Systems and Mahindra Defence Systems said, “This decision is a reflection of the shareholders’ belief that they can best meet emerging customer requirements and address the opportunities in this dynamic market with a flexible, tailored approach that was not easily facilitated by the structure of the existing joint-venture entity.”
BAE officials referred requests for further information to the statement.
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