Bajaj Auto swaps stake in KTM AG for share in parent Pierer Mobility

Bajaj Auto and its partner in KTM AG, Pierer Industrie have announced that they have finalised a stake swap deal with PTW Holding in order to simplify the shareholding in Austrian bikemaker KTM AG. 

Through the share swap agreement, Bajaj Auto will become an indirect stakeholder in KTM as well as in other brands of the Austrian partner comprising Gas Gas, Husqvarna, and Ramon. 

Prior to the current deal, Bajaj Auto and Pierer Mobility AG (PMAG) used to hold approx. 48% and 52%, respectively, in KTM AG. The Pune-based two-wheeler manufacturer's stakeholding was through its Netherlands-based subsidiary Bajaj Auto International Holdings BV (Baibhv). 

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As part of the two-step agreement, BAIHBV has "transferred contributed 46.5% out of its approx. 48% shares currently held in KTM AG to PTW Holding AG (the majority shareholder of PIERER Mobility AG), owned by the Pierer Group."

In return, BAIHBV has been granted a 49.9% stake in PTW Holding AG.

In the second step, "the 46.5% KTM shares now held by PTW Holding AG will be contributed to PIERER Mobility AG against the granting of new shares in the context of a capital increase through contributions in kind," the company said in a statement.

After the execution of the transaction, the shareholding of PMAG in KTM AG has jumped from 51.7% to approx. 98.2%. The Pierer Group will retain the sole control over PMAG. All related parties signed a contract in this regard on Wednesday, September 29.

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"The Management Board of PIERER Mobility AG has resolved to execute a capital increase against contribution in kind in the total amount of EUR 895 million, corresponding to 49.9% in 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 EUR 79.50 per share, which is higher than the current stock market price" the statement further read.

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, it added.

Both the companies had commenced negotiations about the share swap in March 2019 but somewhat the plan was not executed. In July this year, the companies announced their decision to conduct the complex stake swap agreement.