**Bajaj Auto Expands Global Footprint with KTM Acquisition**
Bajaj Auto Ltd is intensifying its focus on international expansion by acquiring a controlling stake in the Austrian motorcycle manufacturer known for the KTM brand. The deal, announced on Thursday, involves an investment of €600 million through debt financing, in addition to the €200 million already invested since FY2024, bringing the total investment to €800 million (approximately ₹7,778 crore). This capital injection aims primarily to settle KTM’s outstanding debts and ensure the company’s operational stability.
The announcement comes just a day before KTM was due to pay €548 million (around ₹5,324 crore) to its creditors. Through its Netherlands-based subsidiary, Bajaj Auto International Holdings BV, Bajaj has increased its ownership in Pierer Bajaj AG (PBAG) from 49.9% to a full stake. Previously, Bajaj’s 49.9% stake in PBAG provided it with indirect control over a 37% share in KTM, as PBAG held a 75% stake in Pierer Mobility AG (PMAG), the parent company of KTM. With this acquisition, Bajaj’s stake in KTM rises to 75%. PMAG is publicly traded on the Austrian stock exchange.
Bajaj’s transition from a minority investor to a majority stakeholder in KTM marks a significant shift in its strategy. The move comes in the wake of KTM’s struggles in the European premium motorcycle market, which led the company to file for insolvency and seek judicial restructuring in November 2024. Creditors approved the restructuring plan on February 25, which required them to receive 30% of their claims in a lump sum by May 23. As the deadline loomed, KTM required additional funding to meet its obligations.
To facilitate this, Bajaj announced on May 16 that it would secure unsecured loans totaling €566 million from JP Morgan Chase, DBS Bank, and Citigroup Global Markets Asia Ltd, aimed at supporting investment activities. By the end of the October-December 2024 period, Bajaj reported a surplus of ₹15,000 crore on its balance sheet, positioning itself well for this acquisition.
The deal includes a total debt funding commitment of €800 million, with €200 million already provided through convertible bonds and loans in four installments of €50 million between FY24 and April-May 2025. This strategic move not only enhances Bajaj’s ownership but also provides essential liquidity to KTM at a critical juncture, reinforcing Bajaj Auto’s role in shaping the future of one of the world’s leading high-performance motorcycle brands.
In conclusion, Bajaj Auto’s acquisition of KTM represents a bold step towards strengthening its international presence and ensuring the sustainability of a renowned motorcycle brand amidst challenging market conditions.
**FAQ**
**What is the significance of Bajaj Auto’s acquisition of KTM?**
Bajaj Auto’s acquisition of KTM is significant as it transforms Bajaj from a minority investor to a majority owner, allowing it to exert greater influence over KTM’s operations and strategy, particularly during a critical restructuring phase.