Hero MotoCorp acquired a 49.2% stake in Erik Buell Racing (EBR) for $25 million. This marks Hero's first equity purchase in an overseas company and will allow them representation on EBR's board. The investment is being made to further technology development and Hero sees both organic and acquired growth opportunities overseas. Hero also announced plans to expand operations into Africa and Latin America, including assembly plants, and new product launches in the coming months.

1. Hero Acquires 49% in US Tech Partner Erik Buell for $25m
The Pawan Munjal that the media in the Capital got to meet on Monday morning was
a different man — not the usually reticent, suit-attired, guarded personality.
This time, the chief of the world’s largest two-wheeler manufacturer, by volume, was
oozing confidence with his shirt sleeves rolled-up, and aggressive body language,
which easily conveyed that he was ready to take on the competition. While
announcing Hero MotoCorp’s first-ever equity purchase in an overseas company — a
49.2% stake for $25 million in its US-based technology partner Erik Buell Racing
(EBR) — Munjal also outlined a slew of aggressive plans that he has already initiated,
which is the imminent foray into Africa with assembly lines, spreading operations in
more countries in Latin America, multiple product launches leading up to the festive
season and a big splash in Delhi’s Auto Expo in February 2014.
The company on Monday announced that the first tranche of $15 million has already
been invested by HMCL, while the second tranche of $10 million will be invested
within the next nine months. Its shares jumped 2.57% on BSE after the Monday
morning announcement, gaining 42.75 to close at 1,705.
The investment in EBR is being done through Hero Moto-Corp’s newly-incorporated
wholly-owned American subsidiary — HMCL (NA). Hero MotoCorp will now have
representations on the EBR board with two directors and one observer.
However, there will be no organisational changes at EBR and Erik Buell will continue
to be its chairman and CEO. Munjal was candid enough to say that he is definitely
looking at both organic as well as inorganic options for growth. In an interview
immediately after making the announcement, he said: “Yes, definitely, I am always
looking out (for further overseas acquisitions)…I am constantly travelling around the
globe, keeping my mind open. If a good opportunity comes our way, I will certainly
look at it.”
“In terms of expanding our global footprint, we are going to commence our operations
in Africa — with launches in Kenya, Ivory Coast and Burkina Faso — very soon. We
will also shortly be launching in Peru and Ecuador in Latin America. This will be in

2. addition to Colombia where we already have our presence,” he said.
Hero is looking at setting up assembly in Africa and Latin America. “The assembly in
Colombia would possibly come up sometime by the middle of next year,” Munjal
said.
On new launches, he said the first of the new launches — variants and refreshes on
existing platforms — will be launched around the festive season this year, although
the completely new model will come up in the calendar year 2014.
“Wait till the Auto Expo next year in Delhi, you will see a lot of new stuff from us,”
said Munjal. “The equity partnership with EBR is reflective of our long-term vision of
transforming Hero MotoCorp to a truly global two-wheeler major with footprints
spread across continents, offering a wide range of technologically-advanced two-
wheelers. As we go on spreading our footprint in new international markets, we will
look at having extended centres of our own R&D at multiple locations around the
world, developing two-wheelers for our global customers. Our fully owned new
overseas subsidiaries such as the one in the US and the Netherlands will play
important roles in our future overseas acquisitions and investments,” he added.