In a first-time partnership between Indian and European firms in the bicycle space, Hero Cycles Sunday announced the acquisition of MIFA, a German company listed on the Frankfurt Stock Exchange with revenues of around Euros 100 million.
"This partnership with Hero Cycles will allow both companies to synergise their operations and respective strengths, to provide a powerful combination in the global bicycle industry," Hero said in a release here without providing financial details of the purchase.
"It's a complex transaction structure and needs several approvals in Germany - we are hopeful of achieving transaction closing in about six months," Pankaj Munjal, co-chairman Hero Cycles, said in a statement.
"However, the operational integration between the two companies will commence immediately," Munjal added.
It was earlier reported that Hero Cycles' subsidiary, Amsterdam-based OPM Global, will invest up to Euros 15 million in MIFA. This stands for a 10 percent capital increase and gives Hero exclusive rights to takeover the German company as well as subsequent rights to a total number of 4.9 million new shares to be issued.
With the 4.9 million new shares and the shares bought from existing shareholders, OPM Global - Hero Cycles is acquiring a majority shareholding of up to 47 percent in MIFA.
"The investment commitment by OPM Global entails significant financial contributions of MIFA's financing partners and is subject to various conditions precedent, especially to an exemption from the German Financial Supervisory Authority from the obligation to make a public takeover offer under the German Securities Acquisition and Takeover Act," MIFA said in a release.