NEW DELHI, India - Hero MotorCorp. Ltd. (HMCL) announces that it has taken a 49.2 percent stake in Erik Buell Racing in exchange for a $25 million investment.
The first payment of $15 million has been made, with the remaining $10 million to be invested within the next nine months, the company announced. The investment is being handled through Hero's new U.S. subidiary, HMCL (NA).
"The equity partnership with EBR is reflective of our long-term vision of transforming Hero MotorCorp to a truly global two-wheeler major with footprints spread across continents," said Pawan Munjal, managing director and CEO of HMCL, in the announcement. "As we go on spreading our footprint in new international markets, we will look at having extended centres [sic] of our own R&D at multiple locations around the world, developing two-wheelers for our global customers. Our evolving relationship with EBR is an initiative in that direction."
The investment gives HMCL (NA) two directors and one observer on the EBR board. "However, there will be no organizational changes at EBR and ... Erik Buell will continue to be its chairman and CEO," the company announced.
The two companies began a strategic alliance last year.
Posted by Mary Slepicka