Ending months of speculation, the Siddharth Shriram group and Honda Motor Co, on Friday, agreed to part ways from their joint venture — Honda Siel Cars India (HSCI) — with the Indian partner selling its entire 3.16 per cent stake to the Japanese partner for Rs.180 crore.
In separate statements, Shriram-led Usha International Ltd. (UIL) and HSCI said both companies had signed an agreement to end the joint venture.
“UIL, which held 3.16 per cent stake in HSCI, had shown interest in divesting from the joint venture to be able to focus and strategically invest to expand its own core business.
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“Therefore, based on the mutual consent, UIL has sold its entire shares to the partner, Honda Motor Co of Japan,” HSCI said.
Following this, HSCI, which was incorporated in December, 1995, will now be a 100 per cent Honda subsidiary in India.
“The process of changing the company name and other formalities will be completed over the next few months,” the car maker said.
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In its statement, UIL said Honda Motor Co has “purchased all of the shares (18 million) that Usha held in HSCI.’’
The Indian entity further said the stake sale had been negotiated at a price of Rs.100 a share, inclusive of a non-compete fee.
“According to the agreement with Honda Motor, Siddharth Shriram has ceased to be a director and Chairman of HSCI,” UIL said.
HSCI President and CEO Hironori Kanayama said: “We have shared a successful and fruitful relationship with UIL over the past 17 years.”
For Honda, the break up of the joint venture is the second in as many years in the automobile sector after it had ended a 26-year-old partnership with the Munjals-promoted Hero Group in the erstwhile Hero Honda in December, 2010.