Termination of Honda joint venture and the renaming
By December 2010, the board of directors of the Hero Honda Group had decided to terminate the joint venture between Hero Group of India and Honda of Japan in a phased manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero Honda.[10] Under the joint venture, Hero Group could not export to international markets (except Bangladesh, Nepal and Sri Lanka) and the termination would mean that Hero Group could now export.[11]
Honda exited the joint venture through a series of off-market transactions by giving the Munjal family, which held a 26% stake in the company. Honda, wanting to focus only on its independent fully owned two-wheeler subsidiary, Honda Motorcycle and Scooter India (HMSI), exited Hero Honda at a discount and get over inr 64000000000 for its stake. The discount was between 30% and 50% to the current value of Honda's stake as per the price of the stock after the market closed on 16 December 2010.[12]
The differences between the two partners had become apparent for a few years before the split over a variety of issues, ranging from Honda's reluctance to fully and freely share technology with Hero (despite a 10-year technology tie-up that expired in 2014) as well as Indian partner's uneasiness over high royalty payouts to the Japanese company. Another major irritant for Honda was the refusal of Munjal family to merge the Hero Honda's spare parts business with Honda's new fully owned subsidiary, HMSI.[12]
As per the arrangement, it was a two-leg deal: In the first part, the Munjal family, led by Brijmohan Lal Munjal group, formed an overseas-incorporated special purpose vehicle (SPV) to buy out Honda's entire stake, which was backed by bridge loans. This SPV was eventually opened for private equity participation, and those included Warburg Pincus, Kohlberg Kravis Roberts (KKR), TPG, Bain Capital and The Carlyle Group.[13] In June 2012, Hero MotoCorp approved a proposal to merge the investment arm of its parent Hero Investment Pvt. Ltd. with the automaker. This decision came 18 months after its split from Hero Honda.[14]
The name of the company was changed from Hero Honda Motors Limited to Hero MotoCorp Limited on 29 July 2011. The new brand identity and logo of Hero MotoCorp were developed by the global design firm Wolff Olins.[15] The logo was revealed on 9 August 2011 in London, to coincide with a cricket match between England and India.[15]
Hero MotoCorp can now export to Latin America, Africa, and West Asia.[15] Hero is free to use any vendor for its components instead of just Honda-approved vendors.[15]
On 21 April 2014, Hero MotoCorp announced its plan on a inr 2540000000 joint venture with Bangladesh's Nitol-Niloy Group in the next five years to set up a manufacturing plant in Bangladesh. The plant started production in 2017 under the name "HMCL Niloy Bangladesh Limited". Hero MotoCorp owns 55% of the manufacturing company and the rest 45% is owned by Niloy Motors (a subsidiary of Nitol Niloy Group
