In its bid to become Global, Hero MotoCorp today has bought 49.2 percent share in US-based Superbike Company Erik Buell (EBR) Racing for $25 million. The remaining share of 50.8 percent of the company would remain by Erik Buell and his wife.
The first tranche of $15 million was invested by Hero MotoCorp Ltd. (HMCL) early Saturday morning (Indian time) while the remaining amount of $10 million will be invested in the next nine months.
Pawan Munjal, Managing Director and Chief Executive Officer of HMCL said, “This partnership is part of HMCL's strategy to globalize the Hero brand and the two brands will together promote and sell EBR as well as Hero bikes in African, European and North American markets.”
"As we go on spreading our footprint in new international markets, we will look at having extended centres of our own research and design at multiple locations around the world," said Munjal.
"This is for the first time that Hero has gone out to buy a company on equity," he added.
Meanwhile, there will be no organizational changes at EBR and Erik Buell will continue to be its chairman and CEO. However, HMCL will have two directors and one observer on the EBR board.
HMCL and EBR formed an alliance last year, under which the Indian two-wheeler marque receives support in terms of latest technology and design to develop future models.
Munjal further said that the company has increased its export target to 350,000 units in 2013-14 from around 200,000 units in 2012-13. The company is aiming to reach the objective of 10 percent of its total volumes from international business in the next four to five years.
(with inputs from IANS)
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