This automotive company enters in a partnership with Honda Motor to acquire 81 per cent stake in its subsidiary!
The acquisition offers numerous benefits, including a global partnership with Honda Motor, access to R&D capabilities, entry into the global sunroof market and synergies with existing operations.
Samvardhana Motherson International Limited (SAMIL) is a globally diversified manufacturing specialist and a leading automotive supplier for original equipment manufacturers (OEMs). With a presence in 41 countries and over 300 facilities, SAMIL provides support to its customers through a dedicated team of over 168,000 professionals. In FY23, the company achieved revenues of USD 12.7 billion, positioning itself among the top 25 largest automotive suppliers worldwide.
Samvardhana Motherson International Limited (SAMIL) is set to acquire an 81 per cent equity stake in Yachiyo Industry Co., Ltd, a Japanese company listed on the Tokyo Stock Exchange. Yachiyo specializes in the production of automobile parts, including sunroofs, fuel tanks, and resin products. With a turnover of JPY 116.1 billion in FY 2022-23 and a book value of JPY 59.2 billion as of March 31, 2023, Yachiyo has a significant presence in the automotive industry. As part of the acquisition, Honda Motor, the current majority shareholder, will purchase the public stake in Yachiyo, making it a wholly owned subsidiary.
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This strategic move forms an 81:19 joint venture between SAMIL and Honda Motor. The acquisition offers numerous benefits, including a global partnership with Honda Motor, access to R&D capabilities, entry into the global sunroof market, synergies with existing operations, and strengthening of SAMIL's presence in Japan. The transaction is subject to regulatory approvals from merger control authorities in China, Brazil, and the United States, along with RBI approval for acquiring an Indian subsidiary. The completion of the acquisition is expected by Q1 FY25, after Honda Motor achieves full ownership of Yachiyo.
The company has delivered returns of 9.16 per cent over the past 1 year and returns of 62 per cent over the past 3 years.
On Wednesday, shares of the company jumped by 7.91 per cent and traded at its 52-week high of Rs 92.30. Additionally, the scrip had a spurt in volume by more than 1.39 times.
Investors should keep a close eye on this buzzing stock!