Bajaj Auto has achieved a significant milestone in its strategic expansion plans, receiving approval from the Austrian Takeover Commission to take control of Pierer Bajaj AG. This development marks a crucial step in Bajaj Auto's efforts to strengthen its position in the European motorcycle market.

Key Highlights

• The Austrian Takeover Commission has confirmed the restructuring privilege for Bajaj Auto International Holdings B.V. (BAIH) to acquire control of Pierer Bajaj AG.
• No mandatory takeover bid is required for Pierer Mobility AG shareholders.
• This approval completes the set of necessary merger control approvals for the transaction.

Transaction Details

Bajaj Auto International Holdings B.V. (BAIH), a wholly-owned subsidiary of Bajaj Auto Limited, is set to acquire the remaining stake in Pierer Bajaj AG. Currently, BAIH holds a 49.9% stake in Pierer Bajaj AG, with the remaining stake held by Pierer Industrie AG (PIAG).

The transaction involves:

1. A share purchase agreement for 100 shares in Pierer Bajaj AG.
2. A call option agreement for up to 50,000 shares in Pierer Bajaj AG.

Both agreements were concluded in April and May 2025, subject to regulatory approvals.

Regulatory Approvals

Bajaj Auto has successfully secured all necessary regulatory approvals for this transaction. Here's a summary of the key approvals:

Implications and Next Steps

The Austrian Takeover Commission's decision confirms that BAIH's acquisition of control over Pierer Bajaj AG, and indirectly over PIERER Mobility AG, is for restructuring purposes. This ruling eliminates the need for a mandatory takeover bid to PIERER Mobility AG shareholders, subject to certain conditions:

1. BAIH must exercise the call option agreement within 20 trading days following the non-prohibition of the merger under EU regulations.
2. BAIH is required to immediately inform the Takeover Commission about the merger's non-prohibition and fulfillment of all conditions precedent.
3. BAIH must publish the change of control at PIERER Mobility AG promptly.

Bajaj Auto expects the final conditions to be met by November 10, 2025, after which BAIH intends to exercise the call option for all 50,000 shares in PIERER Bajaj AG, thereby acquiring sole control over PIERER Mobility AG.

This strategic move is expected to strengthen Bajaj Auto's presence in the European motorcycle market and potentially lead to synergies between the Indian and European operations.

Bajaj Auto , a leading Indian motorcycle manufacturer, is poised to increase its stake in Austrian motorcycle maker KTM from 49.9% to 76%, pending European Union approval. This move comes in the wake of KTM's financial difficulties, which Bajaj Auto's Managing Director Rajiv Bajaj attributes to corporate greed and strategic missteps by KTM's leadership.

Financial Support and Restructuring

Bajaj Auto has extended a substantial support package to address KTM's liquidity crisis:

KTM's Challenges and Mistakes

According to Rajiv Bajaj, KTM's financial troubles stem from several key factors:

1. Entry into electric bicycle business: This diversification was seen as a strategic misstep.
2. Overproduction: Leading to excessive dealer inventory, estimated at over a year's worth of stock.
3. Pursuit of valuation: Bajaj suggests that these decisions were driven by a focus on increasing company valuation rather than sustainable growth.

Restructuring Efforts

In response to these challenges, KTM has initiated several restructuring measures:

• Leadership changes: Replacement of top management.
• Workforce reduction: Employee count decreased from 6,000 to 4,000.
• Supply chain restructuring: Plans are in place to reorganize the supply chain.
• Cost-cutting: Aims to reduce overheads by 50%.

Bajaj Auto's Plans for KTM

As Bajaj Auto seeks to increase its stake, it has outlined several strategies for KTM:

1. Maintain export operations to key markets, including the United States.
2. Implement significant cost-cutting measures.
3. Restructure the supply chain for improved efficiency.

KTM's Performance in India

Despite global challenges, KTM has shown strong performance in the Indian market:

• Sales growth: 70% year-on-year increase
• Outlook: Bajaj expects record sales for KTM in India this month

This situation highlights the complex dynamics of international partnerships in the automotive industry and the challenges of managing global brands amid changing market conditions. As Bajaj Auto moves to take a controlling stake in KTM, the motorcycle industry will be watching closely to see how this partnership evolves and whether it can successfully navigate the current financial turbulence.