Bajaj Auto Set To Acquire Majority Stake In KTM

Bajaj Auto has announced a strategic move to take majority stake in long-time partner KTM AG, committing €800 million for the Austrian motorcycle brand’s revival. In a statement Bajaj Auto has said that the company, through its wholly owned subsidiary Bajaj Auto International Holdings BV (BAIHBV) “intends to take control of the KTM business that is headquartered in Austria, subject to necessary regulatory approvals.” Bajaj Auto’s move is aimed at rescuing KTM’s ongoing restructuring and financial crisis and ensure the brand’s operational continuity.

Also Read: KTM Announces Securing Finance For Restructuring

Also Read: Bajaj Auto Secures Funds For KTM Revival

“With this action and post requisite approvals coming through, Bajaj will shift gears from hitherto being a dormant minority investor to a majority owner in the global KTM company, whilst it continues to accelerate the thriving KTM business that is run out of India under the joint development program, where it develops, makes and sells in India as well as exports to 80 countries across the KTM network,” the company said in the statement. Of the total €800 million debt package, €200 million has already been infused into the company so far and the balance €600 million is being done now, the statement from Bajaj Auto added. 

“The twin move of taking ownership (subject to approvals) and paring down debt by providing liquidity at a crucial stage, positions Bajaj Auto as a driving force in shaping the future of one of world’s most admired high performance motorcycle companies,” the statement from Bajaj Auto further added.

Also Read: KTM Very Important For Bajaj Auto, Says Rajiv Bajaj

Currently, Bajaj Auto, through BAIHBV, holds a 49.9 per cent stake in Pierer Bajaj AG (PBAG) in Austria. The remaining controlling stake in PBAG is held by Pierer Industrie AG, which is owned by Stefan Pierer. PBAG in turn holds 75 per cent stake in Pierer Mobility AG (PMAG), which is the holding company of KTM AG, which owns the KTM, Husqvarna and GasGas brands. Bajaj effectively holds 37.5 per cent in PMAG/KTM prior to the current transaction. How the equity will be spread out and swapped to make Bajaj a majority stakeholder in KTM is still not clear, but eventually, KTM AG will be under Bajaj ownership once the regulatory approvals come into place.

Also Read: Bajaj Auto Swaps Stake In KTM, Gets Share In Pierer Mobility

Bajaj Auto has outlined a set of strategic interventions, including a proposed equity acquisition of a controlling stake in PBAG and in turn, in PMAG/KTM. For now, the debt package of €800 million (approximately Rs. 7,700 crore) seeks to address KTM’s liquidity needs to meet creditor obligations as per the approved restructuring plan and fund restart of KTM AG’s operations.  KTM's financial troubles began in November 2024, with the company seeking urgent funds and then applying for the initiation of judicial restructuring proceedings to agree on a reorganisation plan with creditors within 90 days.

Also Read: KTM In Financial Trouble; Will Bajaj Auto Bail It Out?

Once Bajaj Auto announced that it is working tirelessly to secure funds for the restructure of KTM, and that the Austrian brand is extremely important for the Indian two-wheeler giant, the writing on the wall was almost evident. Eventually, Bajaj Auto had to take a majority stake to bring KTM out of its current crisis and move it on a path to recovery and profitability. 

The immediate next step is to secure binding restructuring orders from the Court in Austria to mark the end of the self-administration process and settle the creditors’ quota. Alongside, applications are being made to the Austrian Takeover Commission, Foreign Investment Control and Merger Control Authorities, as applicable for their approval, Bajaj Auto has stated.

Once the necessary regulatory approvals are received, Bajaj will move to acquire controlling stake in KTM AG, in what will be a shot in the arm for the Austrian brand, which has been in the middle of a financial crisis going to the brink of bankruptcy. The next few weeks and months will be important, for Bajaj to emerge not just as the owner of a global player in the premium motorcycle space, but also for KTM’s future, with focus on the brand's growth and financial viability in the longer term.