![]() ![]() Hero Honda, credited with putting the Indian middleclass on wheels, defied its humble beginnings to quickly emerge as the world’s biggest two-wheeler maker, also ending the stronghold of Bajaj scooters in the country. “The PEs will take between 50-60 % stake in this entity, giving them just under 15% stake in the main company Hero Honda, which would soon sport a new name,” the sources said. Warburg Pincus, Kohlberg Kravis & Roberts ( KKR), TPG, Bain Capital and Carlyle. However, key financial institutions have objected to this move, saying that the deal could favour the Munjals but be detrimental to other shareholders. The Munjal family plans to compensate Honda through high royalty payouts, which could double to nearly 6% of net sales. The discount will be between 30% and 50% to the current value of Honda’s stake as per the price of the stock after the market closed on Wednesday. Honda, which also has an independent fully-owned twowheeler subsidiary-Honda Motorcycle and Scooter India (HMSI)-will exit Hero Honda at a discount and get over $1 billion for its stake. The sources added that the Japanese auto major will exit the JV through a series of offmarket transactions by giving the Munjal family-that currently holds 26% stake in the company-an additional 26%. ![]() Top officials of Honda are arriving here to attend the board meeting, a source said. Sources in the know said most of the terms of the deal, which will see Honda selling its 26% stake to the Munjal family, have been finalized and the matter will now be taken up by Hero Honda’s board on Thursday. ![]() ![]() NEW DELHI: It’s finally splitsville for Hero Honda, one of corporate India’s oldest and most successful joint ventures, with the two founding partners-India’s Munjal family and Japan’s Honda Motor Corp-agreeing to part ways and terminate the 26-year-old relationship due to unresolved differences and ambitious independent plans. ![]()
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