Hero Cycles Off To A New Start With MIFA
Hero Cycles Off To A New Start With MIFA
The bicycle industry had never seen a collaboration between India and Europe uptill now. But this has changed with the recent acquisition of MIFA, a German bicycle maker by India's very own Hero Cycles. While the earlier trend in many industries had been that foreign companies would buy the Indian ones, now the very opposite is happening and Hero Cycles too has joined the marathon with its latest acquisition.
MIFA is a German firm which is listed on Frankfurt's stock exchange and it has revenues of around 100 million Euros. 'This partnership with Hero Cycles will allow both companies to synergise their operations and respective strengths, to provide a powerful combination in the global bicycle industry,' the Indian bicycle maker has said in a statement issued to the media.
'It's a complex transaction structure and needs several approvals in Germany - we are hopeful of achieving transaction closing in about six months,' Pankaj Munjal, who is the co-Chairman of the company has been quoted as saying.
'However, the operational integration between the two companies will commence immediately,' Munjal is also said to have added.
Earlier reports had indicated that Hero Cycles' Amsterdam-based subsidiary OPM Global would invest a sum of 15 million Euros in the German firm MIFA. This equals around 10% capital increase and it provides the Indian bicycle maker with exclusive rights for taking over the German company and subsequent rights to around 4.9 million new shares which would be issued thereon.
Having acquired 4.9 million new shares and shares purchased from existing shareholders OPM Global, Hero Cycles has garnered a majority shareholding of up to 47% in MIFA.
'The investment commitment by OPM Global entails significant financial contributions of MIFA's financing partners and is subject to various conditions precedent, especially to an exemption from the German Financial Supervisory Authority from the obligation to make a public takeover offer under the German Securities Acquisition and Takeover Act,' the German firm has been quoted as saying in a press release.
Indian firm Hero Cycles has been founded by the OP Munjal Group. Germanyis MIFA or Mitteldeutsche Fahrradwerke is a worthy acquisition for building a robust presence in Europe. Hero, the globe's largest bicycle-maker in terms of volume is all set to grow by leaps and bounds, as analysts reckon it will acquire MIFA's high-end technology with special reference to e-bikes.
MIFA is noted to be a major supplier in the mass-market bicycle segment and its products are sold in many supermarket chains such as Metro. MIFA specialises in EDU or electronic drive unit EDU technology which can really boost Hero's prospects.
With this new acquisition, the ever popular Indian brand is all set to cycle off to foreign shores as well.
