Bajaj Auto swaps stake in KTM to get a share in Pierer Mobility

PMAG ups stake in KTM AG from 51.7% to 98.2%; Bajaj Auto becomes indirect partner in all PMAG brands

Bajaj Auto and Pierer Industrie, its partner in KTM AG, on Wednesday announced that they have finalised a plan to simplify shareholding in premium bike maker KTM through a share swap deal. Following this, Bajaj will become an indirect stakeholder in other brands of the Austrian partner — including Husqvarna, GasGas, and Ramon.
 
Earlier, Bajaj Auto and Pierer Mobility AG (PMAG) held around 48 per cent and 52 per cent, respectively, in KTM AG. Bajaj’s shareholding was through its Netherlands-based subsidiary Bajaj Auto International Holdings BV (Baibhv).
 
As part of the two-step deal, Bajaj Auto has transferred 46.5 per cent of its total stake in KTM to PTW Holding AG, the majority shareholder in PMAG. In return, Baibhv has been granted a 49.9 per cent stake in PTW Holding AG.

 

“In a second step, the 46.5 per cent KTM shares now held by PTW Holding AG will be contributed to Pierer Mobility AG (PMAG) against the granting of new shares in the context of a capital increase through contributions in kind,” the company said in a statement.
 
After this transaction was executed, the shareholding of PMAG in KTM AG has increased from 51.7 per cent to around 98.2 per cent. The Pierer Group will continue to retain sole control over PMAG. On Wednesday, all the related parties signed a contract in this regard, the firm said.
 
PMAG’s board resolved on Wednesday to execute a capital increase worth Euro 895 million, corresponding to 49.9 per cent of the existing share capital, by making use of the authorised capital.

In this context, 11.26 million shares will be issued at a price of Euro 79.50 per share, which is higher than the current stock price.
 
“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,” the statement added.
 
Though talks were initiated on this in 2019, they were put on hold. However, in December 2020, Bajaj Auto informed the exchanges that it had revived the talks.

 
The tie-up between Bajaj Auto and KTM dates back to 2012, when it forayed into the Indian market through the launch of the 200 Duke. At present, it has 11 products, including the 390 Duke, RC 200, and RC 390.
 
According to reports, KTM sold 4,389 units here in August, down 38 per cent compared to the 7,116 units sold in August 2020, mainly because the market was anticipating its new RC range.