India's Samvardhana Motherson to buy majority stake in Honda's unit (updated)

Yachiyo Industry Co

04/07/2023 14:33

(Adds details about acquisition, background)
       BENGALURU, July 4 (Reuters) - Indian auto parts maker
Samvardhana Motherson International (SMIL)  SAMD.NS  said on
Tuesday it will buy a majority stake in Japan-based auto-part
maker Yachiyo Industry's  7298.T  four-wheeler business from
Honda Motor Co  7267.T  to expand its product range.   
    The transaction is valued at 22.9 billion Japanese yen
($158.54 million) for a 100% stake in Yachiyo, SMIL said. 
    Honda currently owns a 50.4% stake in Yachiyo. As part of
the transaction, Honda will first buy out the entire public
stake in Yachiyo via a tender offer and retain Yachiyo's
two-wheeler business. 
        SMIL will acquire an 81% stake in Yachiyo's four-wheeler
business, while Honda will have a 19% stake.
  
        Yachiyo makes automobile parts like sunroofs, fuel tanks
and resin products.
        The acquisition will provide SMIL access to research and
development capabilities and foray into the global sunroof
market and also pursue other partnerships with Honda, the
Bengaluru-based company said in a statement.
  
    "The close proximity to Honda Motor plants across the globe
provides an opportunity to offer existing products of Motherson
to Honda Motor globally," SMIL added.
        Yachiyo's four-wheeler business employs about 3,200
people in manufacturing, research and development centers across
eight countries including the U.S., Brazil, Mexico, China,
Japan, Thailand, Indonesia and India, SMIL said.
  
        Yachiyo's business has a book value of 59.2 billion yen
as of March 31, reported revenue of about 116 billion yen and
earnings before interest, taxes, depreciation, and amortization
of 13 billion yen, according to SMIL's statement.
    The acquisition needs approval from authorities in China,
Brazil and the United States, as well as the Reserve Bank of
India, SMIL said.
        
  

($1 = 144.4400 yen)

 (Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by
Nivedita Bhattacharjee and Eileen Soreng)
 ((Navamya.GaneshAcharya@thomsonreuters.com; +91 8805175330 ;))