Stock to watch: Samvardhana Motherson International arm to acquire 81% stake in Yachiyo’s 4W biz

Shares of Samvardhana Motherson International Ltd or SAMIL will be in focus on Wednesday morning after the company via its wholly-owned subsidiary SMRP BV has entered into an agreement to acquire 81 per cent stake in Yachiyo’s four-wheeler (4W) business housed under Yachiyo Industry Co.  The Japan-based company is engaged in production of automobile parts such as sunroofs, fuel tanks and resin products. It reported turnover of 116.1 billion Japanese yen in FY23. Yachiyo's 4W business has a book value of 59.2 billion Japanese yen as on March 31.

Yachiyo is listed on Tokyo Stock Exchange. It has 4W and 2W business housed under Goshi Giken Co Ltd or Goshi.

Honda Motor currently owns 50.4 per cent stake in Listed Yachiyo, and the rest is owned by the public. As a part of this transaction, Honda Motor will first buy out the entire public stake in Listed Yachiyo via a tender offer making Yachiyo a wholly-owned subsidiary.

Further, Yachiyo’s 2W business (housed under Goshi) will get transferred to Honda Motor. Subsequently, Samvardhana Motherson International will acquire 81 per cent equity in remaining Yachiyo 4W business thereby forming an 81:19 Joint Venture with Honda Motor.

The global partnership with Honda Motor will give Samvardhana Motherson International access to strong R&D capabilities, help it foraying into global sunroof market and give Significant synergies with existing business and operations.

The move may give Samvardhana Motherson International an opportunity to enter into other segments with Honda Motor. Besides, it will strengthen Samvardhana Motherson International's presence in Japan.

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