Samvardhana Motherson shares up over 3% following majority acquisition in this company; check key details

Shares of Samvardhana Motherson International (SAMIL) advanced as much as 3.21% to an intra-day high of ₹95.07 apiece on the National Stock Exchange (NSE) on Friday, August 29. This comes after the company announced it will acquire an 81% stake in Japan’s Yutaka Giken Co Ltd (YGCL) for $184 million through its indirect subsidiary Motherson Global Investments B.V.

The Noida-headquartered firm’s board of directors considered and approved the acquisition of the 81% stake, along with voting rights in YGCL. Furthermore, it also approved the acquisition of an 11% stake in Shinnichi Kogyo Co., a subsidiary of YGCL, from Honda.

Honda Motor currently owns a 69.66% stake in it, with the rest owned by the public, the filing added. Post completion of all steps, Honda shall continue to own the remaining 19% voting rights shares in YGCL, SAMIL said.

SAMIL, either directly or through its wholly owned subsidiary, will also acquire 100% of the shares and voting rights in Yutaka Autoparts India Private Limited, including its nominee shareholders, from YGCL, it said in a regulatory filing.

YGCL is a company listed on the Tokyo Stock Exchange, and "The total expected cash outflow for the 81% shareholding is JPY 27 billion ($184 million)," it said.

It, however, did not disclose the outgo for the 11% stake in Shinnichi, which is a subsidiary of YGCL with 62% ownership.

YGCL is engaged in the production of metal components and assemblies, including rotors and stator assemblies for motors, drive systems, brake systems, and thermal management systems.

In a separate regulatory filing, SAMIL revealed that it will acquire an additional 20% stake in Youngshin Motherson Auto Tech Limited (YMAT) from Youngshin Components Co. Ltd., Korea, for ₹6.45 crore.

YMAT was incorporated as a 50:50 joint venture in India between SAMIL and Youngshin Components in 2017.

In June 2023, SMAIL acquired an additional 30% stake from its JV partner. Post the completion of this acquisition, the former will own 100% of the JV. Additionally, a new technical assistance agreement has been established with an independent specialist firm based in South Korea.

Shares of SAMIL were trading 2.07% higher at ₹94.02 apiece, at around 11:28 am.