The Munjal family and Japanese Honda Motors formally announced the end of their 26-year-old joint venture.

After all the speculation surrounding the split, official news confirming the separation marks a new path for the Hero Group to pursue the Indian two-wheeler market as a majority holder. While Honda can also venture out on their own, and possibly even appear as competition for Hero.

At a press conference here, the companies declined to disclose the price negotiations.

“There is a serious corporate governance issue. By not disclosing the price, the Hero group and Honda have made a complete mockery of the system. The board meeting has added to the confusion,” said Anil Singhvi, MD of I-Can Investment Advisors, an investment bank and a shareholder in Hero Honda.

Hero Honda & Honda Motorcycle JV SplitFinalizing Hero-Honda SplitMunjals Gearing Up to Buy Honda stake in JVUpdate : Hero-Honda Joint VentureHero Group To Buy Out Honda’s StakeTags: hero honda, Hero Honda Partnership, Hero-Honda JV, hero-honda news

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The Munjal family and Japanese Honda Motors formally announced the end of their 26-year-old joint venture.

After all the speculation surrounding the split, official news confirming the separation marks a new path for the Hero Group to pursue the Indian two-wheeler market as a majority holder. While Honda can also venture out on their own, and possibly even appear as competition for Hero.

At a press conference here, the companies declined to disclose the price negotiations.

View the Original article

Honda Motor Company, Japan and the Hero Group, India will soon part ways after their 25 years of partnership.The still-united partners have been conferring a change in the ownership of the company that would see the Hero group acquiring a majority over the company. The Hero Group’s offer to buy out Honda might fall flat on its face seeing that there is speculation of Honda making a counter-offer as the Japanese company is unhappy with the discounted current offer.

If sources are to be believed, the introduction of new terms could only prove a boon for both companies. Allegedly, according to the agreement, if either of the two parties wants to exit, the other party may buy these shares at a 30-40% discounted rate. But if the offer is not acceptable, the seller can turn buyer and offer to purchase the shares of the other party at a premium.

Currently, 26% of Hero Honda is worth INR 10,000 crore. Both Honda and the Munjals enjoy right of first refusal over each other’s shares. Responding to Hero’s offer, Honda has made a counter-offer that is being deliberated by the Munjal family and no decision has been concluded yet.

Watch this space for more updates on the Hero-Honda crisis!

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