Samvardhana Motherson share price touched a new 52-week high and gained over 8% on Wednesday’s trading session following the news that the company and Honda Motor signed a strategic collaboration agreement on Tuesday to create an 81:19 partnership. Samvardhana Motherson shares opened at ₹90.61 apiece on BSE. The stock touched intraday high of ₹92.50.
“A strong gap up opening is seen followed by some volatility in initial trades, the momentum is definitely on the positive side, with the bullish gap range 86 – 88 to act as support whereas the momentum has potential to push prices towards 3 digit i.e. levels of 100,”Rajesh Bhosale – Equity Technical and Derivative Analyst, Angel One.
The company that manufactures automotive components, announced on Tuesday that it would buy an 81 percent share in Yachiyo Industry, a subsidiary of Honda Motor, which specialises in four-wheelers.
According to a statement from Samvardhana Motherson (SMIL), the company has partnered with Honda Motor, under which it will create an 81:19 strategic partnership with the latter, in which both parties will work to steer the company towards a strong and sustainable future and ensure that it is fully ready for next-generation products and technologies.
“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,” said Vivek Chaand Sehgal, Chairman, Motherson.
The 2W business will be given to Honda Motor as part of the entire transaction before Motherson buys an 81 percent ownership in Yachiyo’s 4W business, according to the exchange filing.
In a regulatory filing, the company said the cost of acquisition is at an “equity value of JPY 22.9 billion for 100 per cent stake subject to any adjustments in relation to above transaction.”
Yachiyo 4W supports Honda Motor in substantially all of its sunroof and fuel tank requirements at each manufacturing location, the statement said.
The company stated in a regulatory filing that, “subject to any adjustments in relation to above transaction,” the cost of acquisition is at a “equity value of JPY 22.9 billion for 100% stake.”
Honda Motor Co Ltd’s Yachiyo Industry Co Ltd is a division with 4W and 2W companies that is publicly traded on the Tokyo Stock Exchange. In its 13 manufacturing locations and 3 R&D centres, Yachiyo 4W business employs about 3,200 people in 8 different countries, including the USA, Brazil, Mexico, China, Japan, Thailand, Indonesia, and India.
On the technical front, as per trendlyne data, the stock price rose 16.8% and underperformed its sector by 19.7% in the past year.
Samvardhana Motherson to acquire 81% stake in Honda Motor arm Yachiyo; check details
Know your inner investor
Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Download The Mint News App to get Daily Market Updates.
Updated: 05 Jul 2023, 10:29 AM IST