Samvardhana Motherson Says Yachiyo Buyout To Boost Honda Partnership
The acquisition does not involve any plans to relocate the production unit from Japan to India.
Samvardhana Motherson International Ltd. is set to acquire 81% stake in Yachiyo Industry's four-wheeler business, forging a global partnership with Honda Motor Co., according to Director Laksh Vaaman Sehgal.
The deal will not only solidify the collaboration between Samvardhana Motherson and Honda, but also grant them access to Yachiyo's strong research and development capabilities, Sehgal told BQ Prime's Sajeet Manghat.
"Yachiyo has a long history of supplying to Honda's global locations, and Samvardhana Motherson will have the opportunity to bring their existing order portfolio. Our idea is to bring together Honda and Yachiyo management to focus on growth," he said.
Yachiyo Industry Co. is a subsidiary of Honda Motor. The 81% stake acquired by Samvardhana Motherson is valued at 22.9 billion Japanese yen, or Rs 1,301 crore, leaving Honda Motor with 19% stake. The Japanese automobile manufacturer currently holds 50.4% stake in Yachiyo, with the remaining ownership distributed among the public, according to an exchange filing on Tuesday.
The acquisition does not involve any plans to relocate the production unit from Japan to India, Sehgal said. "Motherson does not believe in shifting production units from one location to another. We believe production should be sustained locally," he said.
Samvardhana Motherson aims to complete the acquisition by the first quarter of FY25, according to Kunal Malani, the company's chief financial officer.
The Road Ahead
Despite the global slowdown in manufacturing growth, Samvardhana Motherson has an all-time high order book of $70 billion, with electric vehicles accounting for 20% of the total, according to Malani. "The organic growth is clearly playing out for us," he said.
The company aims to achieve a gross revenue of $19-20 billion by the first quarter of FY25, with a "clear target of $36 billion" for the fiscal.
According to Sehgal, the assets that they are considering for future plans do not require “large equity cheques”.
