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Major auto components maker Samvardhana Motherson International on Tuesday said it will acquire an 81 per cent stake in the four-wheeler business of Yachiyo Industry, a Honda Motor (Japan) subsidiary, for a cash consideration of around $120 million.
Motherson will form an 81:19 strategic partnership with Honda Motor where both partners will drive the company towards a strong and sustainable future and be fully prepared for next-generation products and technologies, the company said in a statement.
Yachiyo Industry is a publicly listed (Tokyo Stock Exchange) subsidiary of Honda Motor which comprises four-wheeler (4W) and two-wheeler (2W) businesses. As a part of the overall transaction, the 2W business (housed under Goshi Giken) will be transferred to Honda Motor before Motherson acquires an 81 per cent stake in Yachiyo’s 4W business, it said.
Yachiyo 4W business employs around 3,200 employees in its 13 manufacturing facilities and 3 R&D centres across eight countries including the US, Brazil, Mexico, China, Japan, Thailand, Indonesia and India.
Sunroof systems
Sunroof systems have high growth potential globally, including in India, due to an increase in demand and are expected to see a surge in application across all car segments. Transition to Hybrid will continue to see the use of plastic fuel tanks, the company said.
“These new product segments are in line with our increasing content per car strategy as well as our customer-centric approach. We believe this business will be highly synergistic with Motherson’s existing portfolio as we see opportunities to grow this new business globally by leveraging our global relationships with automotive manufacturers,” Vivek Chaand Sehgal, Chairman, Motherson, said.
Meanwhile, the company also announced an investment of $14 million for a 12 per cent optionally convertible secured note of US-based Prysm Systems (Prysm). Prysm is engaged in design development, manufacturing, and sale of large format touch-enabled display screens with embedded collaborative software.
Prysm is developing a new “Gen-3” prototype for mass production. Upon successful delivery of the Gen-3 prototype as per agreed specification and associated conditions, which is expected by quarter four of FY2023-24, Motherson will further invest $20 million and convert the secured note to equity for a majority stake (not less than 72 per cent on a fully diluted basis).
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