Noida (India), 4th July 2023
Samvardhana Motherson International Limited (“SAMIL”) via 100% subsidiary of SMRP B.V. (SAHN B.V.) has entered into an agreement to acquire 81% stake in Yachiyo’s 4W (Y4W) Business.
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 transaction emphasises Motherson’s commitment to be a globally preferred sustainable solutions provider for the automotive industry.
Yachiyo Industry Co., Ltd. (“Listed Yachiyo”) is a publicly listed (Tokyo Stock Exchange) subsidiary of Honda Motor Co., Ltd. (“Honda Motor”) which comprises of 4W and 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 81% stake in Yachiyo’s 4W business.
Yachiyo 4W business employs approx. 3,200 employees in its 13 manufacturing facilities and 3 R&D centres across 08 countries including the USA, Brazil, Mexico, China, Japan, Thailand, Indonesia and India with reported revenue and EBITDA of JPY ~116 Bn/ EUR 824 Mn1 and JPY 13 Bn/ EUR 94 Mn1 respectively for FY23. The equity value of the business is JPY 23 Bn / EUR 145 Mn2 for 100% stake.
As a worldwide strategic supplier to Honda Motor with a fully aligned footprint, Yachiyo 4W supports Honda Motor in substantially all of its sunroof and fuel tank requirements at each manufacturing location. The strong relationship has been forged on the back of decades of excelling on Honda Motor’s strict technical and quality expectations.
Sunroof systems have high growth potential globally 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 trend of fuel cell powertrain is also aligned with Type-IV hydrogen storage tank under the advance stages of development.
With its experience of working alongside a global OEM like Honda Motor and coupled with its own technologically advanced R&D capabilities, Yachiyo 4W is well positioned to cater to evolving industry landscape and future mobility. Yachiyo 4W has developed multiple value-added next-generation products like lighter plastic tail gates and type-IV hydrogen storage tanks.
The close proximity to Honda Motor plants across the globe provides an opportunity to offer existing products of Motherson to Honda Motor globally.
Post successful closure of this transaction Motherson will become a partner of choice for Honda Motor. This transaction enables further diversification for Motherson in line with its 3CX10 strategy along with opportunities for the company to offer these products to other OEMs across the globe.
1 Used average conversion rate of FY 2023 (EUR/JPY-140.9)
2 Used conversion rate of June 30th, 2023 (EUR/JPY-157.5)
Commenting of the deal, Mr Vivek Chaand Sehgal, Chairman, Motherson said,
“This acquisition is an important landmark for Motherson as we are honoured to be handpicked by Honda San for a global partnership. We will give our best to live up to the trust bestowed upon us by Honda San. 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 ample opportunities to grow this new business globally by leveraging our global relationships with automotive OEMs. We are looking forward to the exciting times ahead.”
Overview of further transaction steps
- Secure Anti-trust and other applicable regulatory approvals before Tender Offer launch.
- Honda Motor to launch Tender Offer. Tender Offer will be successful if Honda Motor reaches a minimum threshold of 66.7% stake in listed Yachiyo. Honda Motor currently owns 50.4% in listed Yachiyo.
- Once the Tender Offer is successful, Honda Motor shall acquire the remaining public shareholding as per the process defined in Japanese regulations, making it into a wholly owned subsidiary.
- Honda Motor shall purchase Yachiyo’s 52.4% shareholding in the Goshi Giken (2W) business.
- Motherson to buy 81% stake in Yachiyo (4W business) with Honda Motor continuing to retain the remaining 19%.
