![]() ![]() This was a bitter pill to swallow for Hero Honda. Honda’s subsidiaries are run very independently and decide which countries they want to source their products from. However, in 2008, when the issue of exporting the Indian JV’s products to other countries came up, Honda was of the opinion that Hero Honda will have to compete on its own since it could not influence its subsidiaries abroad to import the JV’s products. The agreement was subsequent, modified to allow exports of limited products to a few countries, namely Sri Lanka, Bangladesh, Nepal, and Columbia. ![]() MAIN REASONS FOR PARTINGĪccording to the shareholder’s agreement signed in 1984, the joint venture was only for domestic production and consumption. Later In 2014, Hero Investments was merged with the listed Hero MotoCorp, thereby allowing PE investors to exit the company as any public shareholder. The transaction was completed for a valuation of 739.97 per share – at less than half of market price of 1,518.15 on the Bombay Stock Exchange (BSE). The Munjals acquired the 26% held by Honda in the joint venture through their private holding arm Hero Investments, thereby bringing the ownership of Indian promoter & promoter group holding to 52% (Stake of Hero Investments enhanced to around 43% with this transaction). Honda decided to exit the venture by selling its 26% stake to the Munjal family, the owners of Hero. Both the companies decided to part amicably, with Honda continuing to provide technological support to Hero till 2014, and Hero continuing to pay royalties to Honda. The companies decided to part ways owing to unresolved disputes, and their own plans for the Indian and international markets. (Honda) signed an agreement to dissolve their partnership, thus putting an end to one of the most successful joint ventures in the Indian automobile industry. On December 16, 2010, India-based Hero Group (Hero) and Japan-based Honda Motor Co. ![]() ![]() DEAL IMPACT: HERO Journey after JOINT VENTURE Exit with HONDA TRANSACTION BACKGROUND ![]()
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