The board of Directors of Mahindra & Mahindra Limited (M&M), India's top utility vehicle and tractor maker, has finally approved the acquisition of business assets of Pune-based Kinetic Motor Company Ltd. (KMCL) for Rs 110 crore, subject to due diligence.

The acquisition will be done through a new company to be formed specifically for the company's two-wheeler foray.

In the newly formed company, KMCL will get a 20% stake while M &M will hold the balance 80%.

Sulajja Firodia Motwani, Managing Director, Kinetic Motor will be serving as Non-Executive Director in the new company.

M&M said that the deal will enable it to design and market a range of scooters, value engineered motorcycles and high-end bikes for the Indian as well as global markets, helping it establish a robust, end-to-end two-wheeler business in every segment of the industry.

India is the second largest producer of two-wheelers in the world. The two-wheeler industry has grown from 3 million in the FY98 to 8 millon in the FY08.