Hero MotoCorp Ltd (HMCL), India's largest two-wheeler maker, said on Monday that it will pick up a 49.2% stake in US-based Erik Buell Racing (EBR) for $25 million (about R148 crore) to acquire advanced technologies. This would be HMCL's first-ever equity investment in an overseas company.
EBR is a Wisconsin-based motorcycle sport company founded in 2009 following the shutdown of its founder's former company by parent stakeholder Harley Davidson. The company's first efforts were directed toward production of complete, race-only motorcycles and parts to support privateer racers.
"The first tranche of $15 million has already been invested by HMCL. The second tranche of $10 million is proposed to be invested within the next nine months. The investment in EBR is being done through Hero MotoCorp's newly-incorporated wholly-owned American subsidiary, HMCL (NA)," the company said.
HMCL, which is targeting to achieve annual sales of 10 million units in the next few years, had last year entered into a strategic alliance with EBR.
"The equity partnership with EBR is reflective of our long-term vision of transforming Hero MotoCorp to a truly global two-wheeler major with footprints spread across continents," said Pawan Munjal, CEO and MD of HMCL.