Honda Motor Co., Japan, buys a 3% stake from Usha International, a part of Shriram Group in India, with a deal worth 1.8 billion rupees ($32.5 million). This ends the 16-year partnership with India.
The local firm Usha International sold its entire 3.16 percent stake for 100 rupees each. This turns out as 18 million shares that this local firm sold in the joint venture to Honda Motor, including a non-compete fee. The rising trends of global manufacturers made the presence of Usha International more challenging in the market and this move completely cuts the long-lasting partnership which begun since the time when Honda planned a pricey investment in diesel vehicle production facilities in India.
Since past few months, Usha and Honda were negotiating over the value that the Indian company held in this joint venture. As far as Honda is concerned, it sold its complete 26 percent of stake last year to Hero Group, the local partner in largest 2-wheeler manufacturing business.