The Mahindra group has confirmed that it was exploring collaboration opportunities with VW Group amid reports the automobile maker is preparing to sign an agreement to acquire a stake in Skoda Auto Volkswagen India.

An Autocar Professional report said Mahindra & Mahindra (M&M) was keen on acquiring a 50 per cent stake in VW Group’s India arm Skoda Auto Volkswagen India at a valuation of 800 million-$1 billion.

According to sources, the board of directors of Skoda Auto, currently in India for a crucial meeting, is nearing an agreement.

Significant progress has been made in the negotiations, with a preliminary understanding already reached between the two partners. An official announcement is expected soon.

The transaction is expected to result in M&M gaining access to Skoda Auto VW’s global technology ecosystem, whereas the European manufacturer would get the benefit of Mahindra & Mahindra’s lower-cost vehicle architecture. Skoda Auto Volkswagen India has domestic manufacturing capacity of around over three lakh units.

``As stated earlier, Mahindra and VW Group continue to explore multiple opportunities to expand the collaboration potential. In case there are any concrete outcomes with regard to any of the aforementioned discussions, appropriate disclosures will be made in a timely manner as per the norms under the listing regulations,’’ M&M said in a clarification to the stock exchanges.

In February 1 this year, the Volkswagen group and M&M signed the first supply agreement on components of Volkswagen´s MEB (modular electric drive matrix) platform for Mahindra’s electric platform INGLO.

The partners had said the agreement was a key step on their joint vision for e-mobility collaboration. The deal covered the supply of certain electric components as well as unified cells.

Both the companies had then also said that they will continue to evaluate a potential expansion of the collaboration.