Japan's Honda Motor has formally decided to sell its stake in Indian partner, Hero Group. The board, including Analjit Singh and M Damodaran, is currently finalising the termination of the joint venture. However, sources inform that the decision on finalising private equity players has been deferred.
It is learnt that Hero will acquire 26% stake from Honda for an estimated USD 1-1.2 billion. Sources also add that Hero Honda is likely to pay a royalty of Rs 2,300-2,400 crore over three to four years to Honda.
CNBC-TV18 reports suggested that investors have not been in favour of Honda Motor selling its share to Munjals-led group on a discounted price, as they fear this well lead to Hero having to pay more in royalty to the Japanese automobile major.
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