New Delhi, Aug. 29 -- Indian auto parts maker Samvardhana Motherson International (SMIL) on Friday approved the acquisition of a majority stake in Japan-based Yutaka Giken Co Ltd for 27 billion yen ($184 million, or Rs 1,615.5 crore).

Samvardhana Motherson will acquire the stake from existing shareholder Honda Motor Co, whose holding in Yutaka Giken will fall to 19% from the current 69.66%, SMIL said in a stock exchange filing. The acquisition will be made through SMIL's wholly-owned subsidiary Motherson Global Investments BV.

Apart from strengthening its partnership with Honda Motor, the acquisition will help SMIL expand its reach with Japanese OEMs, allowing it to cross-sell Yutaka Giken's products in emerging markets..

SMIL will also fully acquire Yutaka Giken's subsidiary Yutaka Autoparts India Pvt Ltd and pick up an 11% stake in Shinnichi Kogyo Co Ltd from Honda Motor.

Yutaka Giken manufactures automotive components for motor assemblies, including rotors and stator assemblies, drive systems, brake systems, and thermal management systems. It operates one R&D centre and 13 manufacturing facilities across Japan, China, the US, Thailand, Brazil, India, Indonesia, Mexico, and the Philippines.

In FY25, the company reported revenues of $2.4 billion, a tad down from $3.3 billion the previous year and $3.2 billion in FY23.

The deal, subject to regulatory approvals in Japan, the US, China, Brazil, and Mexico, is likely to be completed by April-June 2026.

Separately, SMIL's board also approved plans to increase its stake in Youngshin Motherson Auto Tech Ltd, its clutch assembling joint venture with Korea's Youngshin Components Co Ltd, for Rs 6.54 crore. This will make the JV, set up in 2017 with an equal shareholding, SMIL's wholly-owned subsidiary.

In June 2023, SMIL had acquired an additional 30% stake from Youngshin Components. The all-cash transaction is subject to completion of certain conditions and is likely to be finalized between October and December this year.

In FY25, Youngshin Motherson reported revenues of Rs 138 crore, compared with Rs 106.5 crore a year ago.

On Friday, shares of Samvardhana Motherson traded 2.14% higher at Rs 94.09 on the BSE.

Published by HT Digital Content Services with permission from VC Circle.