Hero Group may Buy 6 percent Stake in Hero Honda, Honda prepares to exit

Hero Group is expected to buy 6% stake in the Hero Honda directly. The purchase is expected to happen on 24Th of October this year. Hero Group will buy the stake directly from the Honda Motors. The news was made public by the Indian media.The Hero Honda group is a merger of Hero Group of Munjal family and the Honda, a Japan bike maker. Honda motors constitute 26% stake in the company and is expected to divest it for the purpose of leaving the joint venture between the two firms. The huge proposal was made by the Munjal family in order to regain the control over Hero Honda.

According to the news earlier the Munjal family Hero group was planning to take these 26% stake from the Honda by forming Special purpose vehicle (SPV). But now the company has altered the earlier plans and now the company will first buy 6% stake directly from Honda Motors and rest 20% will be taken away through the route of SPV.Now the status of company stake will be such that 51 % of SPV will be under Munjal family which will constitute 10.20% stake of Hero Honda. Moreover the KKR group will be constituting the 30% share of SVP which is equivalent to 6 % stake in Hero Honda.

Now the Mujal family has given the option of 19% stake of SPV to KKR. This makes it clear that the Munjal family is owning 42.2% in Hero Honda.Hero Honda has gone through major success stories in this collaboration and proof is that the company is standing at the second position in the field of two wheeler manufacturing field. From this tremendous organisation Honda Motors is planning its exit. This can be a major move in the history of Hero Honda.As per the news the Honda motors officials had flown to New Delhi to have a meet with the Munjal family and discuss the situation and come to a final conclusion.