Samvardhana Motherson to acquire 81% stake in Honda's Subsidiary Yachiyo’s 4W Business

Samvardhana Motherson International (SAMIL) today announced it has entered into an agreement to acquire an 81% stake in Yachiyo's 4W (Y4W) Business.

According to the company's statement, The strategic partnership between Motherson and Honda Motor, with both companies working together to ensure a strong and sustainable future and to stay ahead in terms of next-generation products and technologies. 

Yachiyo Industry Co., a publicly listed subsidiary of Honda Motor, includes both 4W and 2W businesses. As part of this deal, the 2W business (operated by Goshi Giken) will be transferred back to Honda Motor before Motherson acquires the 81% stake in Yachiyo's 4W business.

Yachiyo's 4W business currently employs around 3,200 people across 13 manufacturing facilities and 3 R&D centers in eight countries, including the USA, Brazil, Mexico, China, Japan, Thailand, Indonesia, and India. The reported revenue and EBITDA for Yachiyo's 4W business in FY23 are approximately JPY 116 billion (EUR 824 million) and JPY 13 billion (EUR 94 million), respectively. The total equity value of the business amounts to JPY 23 billion (EUR 145 million) for 100% stake.

Yachiyo's 4W business has been a strategic supplier to Honda Motor for many years, providing sunroof and fuel tank solutions for their manufacturing locations worldwide. The strong relationship between the two companies has been built on Yachiyo's ability to meet Honda Motor's strict technical and quality standards.

Sunroof systems are experiencing significant global growth due to increased demand and are expected to be used in various car segments. The transition to hybrid vehicles will continue to drive the demand for plastic fuel tanks. Additionally, the development of fuel cell powertrains aligns with the advanced stages of Type-IV hydrogen storage tanks.

The company said it has developed value-added next-generation products such as lighter plastic tailgates and Type-IV hydrogen storage tanks. The proximity of Yachiyo's facilities to Honda Motor plants worldwide also presents an opportunity for Motherson to offer its existing products to Honda Motor on a global scale, it said.

Post-transaction, Motherson will become a preferred partner for Honda Motor. This transaction aligns Motherson's 3CX10 strategy to diversify the company while providing opportunities to offer its products to other OEMs worldwide.

The tender offer will be initiated by Honda Motor, and its success depends on reaching a minimum threshold of 66.7% stake in the publicly listed Yachiyo. Currently, Honda Motor owns a 50.4% stake in Yachiyo. If the tender offer is successful, Honda Motor will acquire the remaining public shareholding in accordance with Japanese regulations, making Yachiyo a wholly-owned subsidiary.

Furthermore, Honda Motor will purchase Yachiyo's 52.4% shareholding in the Goshi Giken 2W business. Motherson, on the other hand, will acquire an 81% stake in Yachiyo's 4W business, while Honda Motor will retain the remaining 19% ownership.

Commenting of the deal, Vivek Chaand Sehgal, Chairman, Motherson, said, "This acquisition is an important landmark for Motherson as we are honoured to be handpicked by Honda San for a global partnership. We will give our best to live up to the trust bestowed upon us by Honda San. These new product segments are in line with our increasing content per car strategy as well as our customer-centric approach. We believe this business will be highly synergistic with Motherson’s existing portfolio as we see ample opportunities to grow this new business globally by leveraging our global relationships with automotive OEMs. We are looking forward to the exciting times ahead."

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