Pendragon suitor Hedin Mobility Group has secured a foothold in the UK car dealership sector with the acquisition of four franchise points from Mercedes-Benz Retail Group.
The Swedish business confirmed this afternoon (November 24) that it had completed the acquisition of the German premium carmaker’s dealerships at its Brooklands Mercedes-Benz World operation in Weybridge, Surrey, along with Dartford, Croydon, and West Bromley.
It means that Hedin, which had its ‘put up or shut up’ deadline for takeover negotiations with AM100 PLC Pendragon extended this week, has secured a place in the UK market earlier than many had expected.
The sale of its South London market area also completes Mercedes-Benz’s exit from the car retail sector – first announced in May last year – following Mercedes-Benz Retail Group disposals to Sytner Group, Sandown Motors and L&L Automotive.
Commenting on the acquisition today, the founder and CEO of Hedin Mobility Group, Anders Hedin, said: “Through this acquisition, we take our first step into Europe’s second largest car market and establish a strong foothold for further growth.
“We are pleased to expand with our core brand Mercedes-Benz through the acquisition of these four dealerships, comprising the South London Market Area, and we look forward to welcoming the employees and customers of these four sites to Hedin Mobility Group.”
The four dealerships acquired by Hedin employ a total of approximately 360 people.
News of the transaction comes just days after AM highlighted the scope for overseas investment in the UK car retail sector in a special news insight report for the November edition of AM Magazine.
The mini budget of former Chancellor of the Exchequer was part of a series of economic triggers that weakened the value of the pound and made the acquisition market appear more appealing to overseas investors.
Earlier this month AM reported that Dubai-based franchised car retailer AW Rostamani Group, already a majority shareholder in Brayleys Cars, had broadened its UK footprint with the acquisition of nine West Way car retail sites from Nissan Motors GB.
Offering his insight in the recent AM Magazine feature, Alistair Cassels, head of automotive advisory at MHA, told AM the Hedin’s offer for Pendragon was also “starting to look particularly good value” following the recent currency fluctuations.
He stated: “The offer amounted to circa £400m, which would have been around $580m less than a year ago. Today that conversion stands at circa $460m or a 20% discount.”
Cassels added: “Over the past five years we have seen a number of overseas entrants, including Motus, Super Group and Group 1, and we know there is still a lot of appetite from those overseas businesses to acquire more.
“As for other newcomers, like Hedin, some might have grown as much as they can in their home territory and be looking for a new opportunity. Others could be looking to make the most of what is – in some ways – quite a favourable climate for M&A activity.”