India’s Samvardhana Motherson to buy majority stake in Honda unit

BENGALURU, July 4 (Reuters) – Indian auto parts maker Samvardhana Motherson International (SMIL) (SAMD.NS) he said Tuesday he will buy a majority stake in Japanese auto parts maker Yachiyo Industry’s (7298.T) four-wheel drive business of Honda Motor Co (7267.T) to expand its range of products.

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 purchase the full public interest in Yachiyo through a public offering and will 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 manufactures auto parts such as sunroofs, fuel tanks, and resin products.

The acquisition will provide SMIL with access to research and development capabilities and will foray into the global sunroof market and will also seek other partnerships with Honda, the Bangalore-based company said in a statement.

“The proximity to Honda Motor plants around the world provides the opportunity to offer existing Motherson products to Honda Motor globally,” added SMIL.

Yachiyo’s four-wheeler business employs some 3,200 people in manufacturing, research and development centers in eight countries, including the US, 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 income of about 116 billion yen, and earnings before interest, tax, depreciation and amortization of 13 billion yen, according to the SMIL 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 Bangalore; Edited by Nivedita Bhattacharjee and Eileen Soreng

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