Hero MotoCorp to buy 49% stake in Erik Buell for $25m
Hero MotoCorp has incorporated a wholly owned arm HMCL (NA) in the US, which will invest in EBR, with which Hero already had a technology tieup.
July 01, 2013 / 17:40 IST
Moneycontrol Bureau
India's largest two-wheeler maker Hero MotoCorp is investing USD 25 million in US-based motorcycle maker Erik Buell Racing to buy a 49.2 percent stake.Hero has incorporated a wholly owned subsidiary HMCL (NA), Inc in United States, which is investing in EBR.The first tranche of USD 15 million has been invested by HMCL (NA) on June 28, and the second tranche of USD 10 million is proposed to be invested within the next 9 months, it said.Hero and Japan's Honda had ended a long-standing joint venture in India in 2010, post which Hero started scouting for technology to power its motorcycles.It signed a technology sharing deal with EBR in February 2012. The East Troy, Wisconsin-based company makes customised superbikes and Hero had said the two companies were working together to develop sports bikes.Hero is also developing the concept hybrid scooter Leap, which was showcased at the Delhi Auto Expo last year, in collaboration with EBR, the compay had said.With the acquisition of 49.2 percent stake, Hero says it will be more strategically involved in EBR. It will also be placing 2 directors on EBR's board.The deal will be funded via internal accruals. Hero MotoCorp shares were up 1.2 percent at Rs 1,683.60 on NSE in morning trade on Monday.Also Read: VA Tech Wabag confident of 20-25% order book growth in FY14Nachiket Kelkar
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