Mahindra Two Wheelers Ltd (MTWL), an unlisted subsidiary of Mahindra & Mahindra Ltd and part of the $16.5 billion Mahindra Group, has made a binding offer to acquire a 51% stake in Peugeot Motocycles (PMTC), part of the Euro 54 billion PSA Group based in France, M&M said in the filing.

The deal will involve infusion of 15 million euros ($18.93 million) into Peugeot Motorcycles to finance projects, Mahindra said in a statement issued to the National Stock Exchange. The company did not give more information about the transaction.

"The transaction between MTWL and PSA, subject to Works Council consultation, as part of the employee dialogue process and anti-trust law, would involve infusion of Euro 15 million into PMTC to finance projects implemented through the strategic partnership, and further sale of shares by PSA which would allow MTWL to take a 51% stake in PMTC," the company filing stated.

According to a newswire agency the scooter business of PSA has been loss making for over a decade. In 2013, it sold 79,000 vehicles which was a gain of 8.2%. The unit employs nearly 500 people in France and 300 people at a joint venture in China.

Back in Europe, Peugeot has been facing stiff competition from the European scooter leader Piaggio. At the end of 2012, PSA closed an engine plant for the scooter business concentrating production at a factory in Mandeure in eastern France.

In a recent interaction with ET, Pawan Goenka, ED, Mahindra & Mahindra, had said, M&M is always interested and is open for M&A opportunities in the automotive space.