Samvardhana Motherson to acquire majority stake in Yachiyo Industry

Samvardhana Motherson International Limited (SAMIL) is set to acquire a significant stake in Yachiyo Industry Co., Ltd., a renowned Japanese company specializing in the production of automobile parts such as Sunroofs, Fuel tanks, and Resin products. This acquisition is expected to foster collaboration and synergy in the automotive industry and strengthen SAMIL's presence in Japan.

Yachiyo is involved in the production of automotive components, including Sunroofs, Fuel tanks, and Resin products. Yachiyo reported a turnover of JPY 116.1 billion for the fiscal year 2022-23, with a book value of JPY 59.2 billion as of March 31, 2023.

SAMIL, through its subsidiary, will acquire 100% of Yachiyo's shares, while Yachiyo's 2-wheeler business will be transferred to Honda Motor. SAMIL will also acquire 81% equity in Yachiyo's 4-wheeler business, forming an 81:19 joint venture with Honda Motor.

The acquisition is driven by several factors, including the establishment of a global partnership with Honda Motor, access to robust R&D capabilities, entry into the global sunroof market, and synergies with existing operations. It also supports SAMIL's diversification strategy and strengthens its presence in Japan.

The transaction requires merger control clearance from authorities in China, Brazil, and the United States. The tender offer is set to launch on October 5, 2023, followed by securing regulatory approvals by the end of October 2023. The transaction is expected to be completed in Q1 FY25.

The acquisition involves a cash consideration with an equity value of JPY 22.9 billion for 100% of Yachiyo's stake, subject to adjustments.