In a statement, M&M said under the 'binding offer' made by Mahindra Two Wheelers Ltd (MTWL), there would be an "infusion of 15 million euro into Peugeot Motocycles (PMTC) to finance projects implemented through strategic partnership, and further sale of shares by PSA, which would allow MTWL to take  51 percent stake in PMTC."

"The transaction between MTWL and PSA is subject to Works Council consultation as part of the employee dialogue process and anti-trust law," it added.

Commenting on the development, M&M Executive Director Pawan Goenka said, "The coming together of Mahindra and Peugeot is a win-win for the two-wheeler businesses of both companies. Mahindra would offer access to the Indian market, mass market product technology and competence in marketing while Peugeot brings premium range, a strong European footprint, and a globally recognized brand."

This partnership would enable both MTWL and PMTC to speed up their international expansion by driving synergies and leveraging respective strengths of both parties, he added.

PMTC, also known as Peugeot Scooters is a key player in urban mobility in Europe for 116 years, and is the oldest motorized two-wheeler manufacturer in the world.

It offers one of the most comprehensive range of scooters and mopeds, from 50cc to 400cc, including the successful three-wheeled scooter Metropolis in the European market, M&M said in its statement.

Over the past few years, Mahindra has strengthened its position in the two-wheeler segment globally. Mahindra Racing competes at the highest level of global motorcycle racing in the Moto3 category of MotoGP, while Mahindra GenZe recently revealed its electric two-wheelers in US market that offer sustainable urban transport solutions to a new generation of US consumers.

The company had recently launched Gusto scooter. MTWL also has sales and distribution operations in Latin America, Africa and South Asia. It has assembly operations in many of these markets.