India’s Mazagon Dock To Acquire Majority Stake In Sri Lanka’s Colombo Dockyard For $53 Million

In a significant regional expansion move, Mazagon Dock Shipbuilders Limited (MDL), a state-run Indian shipbuilding company, will acquire a controlling stake in Sri Lanka’s Colombo Dockyard PLC (CDPLC) under a $52.96 million deal. This marks MDL’s first international foray and is expected to bolster India’s strategic presence in the Indian Ocean.

The investment will be executed through a mix of primary infusion and secondary share purchase, including acquisition of shares from current majority shareholder Onomichi Dockyard Co Ltd.

What does this acquisition mean for India and MDL?

MDL’s acquisition is seen as a “major milestone in the company’s transformation from a purely domestic shipbuilder into a regional maritime player with global aspirations.” The deal is also expected to “expand India’s strategic presence in the island nation,” especially amid increasing concerns in New Delhi over China’s growing influence in Sri Lanka.

Colombo Dockyard PLC, the largest shipyard in Sri Lanka, is “the flagship of Sri Lanka’s maritime industry” and serves commercial and governmental clients across Asia, the Middle East, and Africa. “Located in the Port of Colombo, Colombo Dockyard PLC (CDPLC) gives MDL a strategic foothold in the Indian Ocean Region—a key maritime corridor,” the company said in a statement.

How will CDPLC benefit from MDL’s acquisition?

Officials say the CDPLC, which is under financial distress, “can benefit from MDL’s strong financial capabilities and resource base thereby expediting the turnaround process.” The acquisition is expected to ensure “a continuous revenue stream of ship repairs from the Indian sub-continent,” while also unlocking potential orders that MDL can now redirect to CDPLC.

Further, “the resources available at both the yards can be shared for mutual benefit,” and “the detailed design capabilities possessed by both the yards can be leveraged for projects at MDL as well as at CDPLC.”

Will this help integrate regional maritime operations?

Yes. MDL is aiming to create “a supply chain and industrial connectivity,” with the investment positioning both shipyards to collaborate more efficiently. Officials noted that both shipyards have decades of expertise and their combined capabilities will “result in a win-win scenario.”

MDL can also “leverage its resources for augmentation of the operations of CDPLC and its subsidiaries in other ports of the country based on opportunities that may arise.”