Renault Nissan Alliance’s unexpectedly pulled out from the race to acquire Ssangyong Motor Co. Tuesday, making it a three-way competition among one Korean and two Indian firms, sources said.

As the deadline for final bids for Korea’s smallest carmaker came Tuesday, India’s largest tractor maker Mahindra and Mahindra, Indian conglomerate PK Ruia Group, and Korean hat maker Young An Hat Co., which has Daewoo Bus Co. submitted their binding offers, sources said.

Renault Nissan Alliance was considered the most likely candidate among the six preliminary bidders for the ailing SUV specialist.

Sources said that one or more preferred bidders could be named as early as this week as the company hopes to wrap up the sale before the end of the year.

Ssangyong said earlier that the selection will be made before the end of the month.

Ssangyong, which went into court receivership last February, has been looking for a new majority shareholder since May.

The company had set the deadline for binding bids on July 20, but the date was pushed back at the request of some of the bidders.

For Mahindra and Mahindra, gaining control of Ssangyong would be an opportunity to gain access to advanced technologies needed to expand its presence in the SUV market.

PK Ruia Group seeks to add automobile manufacturing to its business portfolio that currently includes tire and auto parts.

Young An Hat wants to boost its presence in the automotive market and enter passenger vehicles. Its affiliate Daewoo Bus sold about 1,300 vehicles taking 0.2 percent of the domestic market during the first seven months of the year, according to the Korea Automobile Manufacturers Association. Adding Ssangyong to its portfolio would increase the share to more than 2 percent.

Local media projected that a successful bidder would acquire new shares, the number of which will match the currently issued 36.12 million, putting estimates upwards of 500 billion won ($428 million).

Ssangyong closed at 15,200 won on Tuesday, up 0.33 percent from Monday, pushing up market capitalization to about 550 billion won.

In addition, those acquiring the carmaker will have to raise additional funds to repay Ssangyong’s debts, which stand at about 760 billion won.

By Choi Hee-suk (cheesuk@heraldcorp.com)