 "Hero MotoCorp forays into foreign market with Erik Buell buy")
Two-wheeler maker Hero MotoCorp has acquired 49.2 percent stake superbike company Erik Buell Racing (EBR) for $25 million through itswholly owned subsidiary HMCL (NA)in the United States.
[caption id=“attachment_918037” align=“alignleft” width=“380”]
Reuters[/caption]
The acquisition marks Hero’s fray into foreign markets. Products of both Hero and Erik Buel will be sold through this joint venture in North America and Europe.
Hero MotoCorp’s US unit invested $15 million in Erik Buell on June 28, and the remaining $10 million will be paid within nine months, the company said in a statement.
Hero and Japan’s Honda had ended a long-standing joint venture in India in 2010, post which Hero started scouting for technology to power its motorcycles. However, Hero had not launched any new productsrecently because it had to go back to the drawing board after Honda’s technical know how ceased.
Hero MotoCorp already had an existing technology sharing partnership with EBR.With this partnership, Hero MotoCorp will now have representations on the EBR board with two directors and one observer.
Post the deal with Erik Buell, Hero plans on launching new bikes in 2014.