TVS Motor skids 7% on acquisition of Switzerland's e-bike player SEMG

This acquisition furthers TVS Motor's commitment towards e-personal mobility products, the company said.

Shares of TVS Motor Company slipped 7 per cent to Rs 585.20 on the BSE in Friday’s intra-day trade in an otherwise firm market after the company announced it acquired 75 per cent stake in Swiss E-Mobility Group (SMEG) for $100 million (about Rs 752 crore).

The acquisition reaffirms TVS Motor Company’s commitment to expansion in Europe through a portfolio of premium and technology leading brands, including Norton Motorcycles and EGO Movement, which were recently acquired, the company said in a press release. TVS Motor had bought 80 per cent stake in EGO Movement for $17.9 million in September 2021.

This acquisition furthers TVS Motor’s commitment towards e-personal mobility products. “We are strengthening our presence in the rapidly growing e-bikes segment. SEMG has strong omnichannel distribution and aspirational brands, including Cilo, Simpel, and Zenith – Bikes,” the company’s management said.

SMEG was incorporated in 2018 and is mainly operating in E-bike segment with revenue (FY20) pegged at around Rs 550 crore. SEMG is a fully integrated e-bike platform with its core business consisting of purchase and re-sale of own branded e-bikes, third party branded e-bikes and spare parts through retail and online stores in Switzerland and Germany.

SEMG has a network of over 30 retail stores across Switzerland and Germany with plans to expand into other European Countries. The transaction is concluded at a P/S ratio of ~1.2x, ICICI Securities said in a note.

In the past three months, the stock of TVS Motor underperformed the market by falling 8 per cent, as compared to 3 per cent decline in the S&P BSE Sensex. In the six months, the stock was up 5 per cent, as against a10 per cent rally in the benchmark index.

At 11:04 am; TVS Motor was down 4 per cent at Rs 607, as compared to 1.2 per cent rise in the S&P BSE Sensex. The trading volume at the counter more-than-doubled with a combined 4.3 million equity shares changing hands on the NSE and BSE.