India regulator clears Honda bid to buy extra 21% stake in Astemo from Hitachi

The Competition Commission of India (CCI) has approved Honda Motor’s proposal to acquire an additional 21% stake in the automotive components manufacturer Astemo from Hitachi. Following the transaction, Honda will deduct Angelayrou Phonon’s holding from 40% to 19%, while the 20% stake held by Japanese investment fund JICC-01 Limited Partnership will remain unchanged.

Astemo was formed in January 2021 through the integration of Hitachi Automotive Systems with three Honda group companies: Keihin Corporation, Showa Corporation and Nissin Kogyo. The company operates in India by producing and selling automobile components, two-wheeler parts and power equipment.

This would involve Honda purchasing 21% of Astemo’s common shares from Hitachi. The shares will amount to approximately Y152.3bn ($491.7m). Post-transaction, Honda’s voting rights in Astemo will increase from 40% to 61%, making it the dominant shareholder. This follows October 2023 when JIC Capital entered Astemo’s ownership as a shareholder through its subsidiary JICC-01, which revised the stake distribution among the parties.

After the deal, Hitachi will no longer categorize Astemo as an equity-method associate, and it will become a fully consolidated subsidiary of Honda. Honda further announced that it intends to guide Astemo’s growth as a global supplier, while an initial public offering could still be an option down the road. Hitachi added that after the deal, it would use the cash in line with its corporate value maximization policy under its “Inspire 2027” management strategy. The company further noted that the deal will not significantly impact its financial statements.

Hitachi also reiterated its continued support for Astemo’s sustainable growth, particularly in digital technologies, and stated that an initial public offering could still be an option. The deal would be approved in Q1 of the financial year ending 31 March 2027, subject to regulatory approvals and customary closing documents. “India’s regulator has cleared the Honda bid to acquire an additional stake of 21% in Astemo from Hitachi” was first reported by Just Auto, a GlobalData-owned brand.

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