Bajaj Auto swaps stake in KTM to get a share in Pierer Mobility

Bajaj Auto swaps stake in KTM to get a share in Pierer Mobility


Bajaj Auto and Pierer Industrie, its partner in KTM AG, announced on Wednesday that they have simplified the shareholding in premium bike maker KTM through a share swap deal, following which Bajaj will become an indirect stakeholder in other brands of Austrian partner – including Husqvarna, Gas Gas and Ramon.

Before the current deal, Bajaj Auto and Pierer Mobility AG (PMAG) used to hold around 48 per cent and 52 per cent, respectively, in KTM AG. Bajaj’s shareholding was through its Netherlands-based subsidiary Bajaj Auto International Holdings BV (Baibhv). As part of the two-step deal, Bajaj Auto has transferred 46.5 per cent of the total stake in KTM to PTW Holding AG, the majority shareholder in PMAG. In return to this, Baibhv has been granted a 49.9 per cent stake in PTW Holding AG.

“In a second step, the 46.5 per cent KTM shares now held by PTW Holding AG will be contributed to Pierer Mobility AG (PMAG) against the granting of new shares in the context of a capital increase through contributions in kind,” the company said in a statement. Following the execution of this transaction, the shareholding of PMAG in KTM AG has increased from 51.7 per cent to around 98.2 per cent. The Pierer Group will continue to retain sole control over PMAG. On Wednesday, all the related parties have signed a contract in this regard.

The management board of PMAG has resolved on Wednesday to execute a capital increase against contribution in kind in the total amount of Euro 895 mio (million in German), corresponding to 49.9 per cent of the existing share capital, by making use of the authorised capital. In this context 11,257,861 shares will be issued at an issue price of Euro 79.50 per share, which is higher than the current stock market price.

“The capital increase will be carried out exclusively against contribution in kind of KTM shares by PTW Holding AG and under exclusion of subscription rights of the other shareholders. The capital increase will be executed, subject to the approval of the supervisory board, in the second half of October,” the statement added.

Though the talks were initiated way back in 2019, it was later put on hold. However, in December 2020, Bajaj Auto has informed the exchanges that it has restarted talks with KTM’s parent Pierer Mobility AG (PMAG) to swap its stake in KTM for a stake in PMAG.

PMAG is one of the top motorcycle manufacturers in the premium segment owning brands like KTM, Husqvarna and GasGas. The Austrian company is listed on the exchanges in Vienna, Zurich and Frankfurt.

The tie up between Bajaj Auto and KTM kick-started way back in 2012, when it forayed into the Indian market through the launch of 200 Duke. At present, its product portfolio includes around 11 products including 390 Duke, RC 200 and RC 390. Moreover, its range of products include motorbikes starting from 125 cc, extending up to 390 cc – with categories including sports, street naked, adventures and racing.

According to reports, KTM’s domestic sales stood at 4,389 units in August 2021, down 38 per cent compared to 7,116 units in August 2020, mainly on market anticipation that the company is expected to come up with its new RC range in the country.

KTM and Husqvarna have reportedly plans to foray into the electric vehicle segment in India. It had already showcased an electric scooter (Vektorr) and an electric motorcycle (E-Pilen) at an international motor show in Munich.

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