At JRE School of Management

1. Presented by:
Sandhya Singh
Ankit Jain
Aalok Aashish
MERGER

2. OVERVIEW
Introduction aboutTVS and BMW Mottorad
Background of the Deal
Type of the Deal
Deal Size
Impact of the Deal
Expert Comments
Conclusion

3. INTRODUCTION
BMW MOTORRAD
BMW Motorrad is the motorcycle brand of the German company BMW, part of its
Corporate and Brand Development division.
BMW Motorrad has produced motorcycles since 1923, and revenues for 2009
were €1,069 million from the sale of 87,306 motorcycles,a drop on the 2008 figure
of €1,230 million from the sales of 101,685 motorcycles.In May 2011, the
2,000,000th motorcycle produced by BMW Motorrad was a R1200 GS.

4. INTRODUCTION
TVS Motor Company Limited, which is part ofTVS Group, manufactures
motorcycles, scooters, mopeds and auto rickshaws in India.
Revenue 74.34 billion (US$1.2 billion) (2012)
Profit 13.2 billion (US$210 million) (2012)

5. BACKGROUND OFTHE DEAL
Having seen KTM,Triumph and a
resurgent Ducati eye a move to Asian
markets, BMW wants in but without
devaluing its brand equity.
Using its wholly-owned Italian subsidiary
Husqvarna to forge a tie-up with Hosur-
based bike makerTVS is one of the tasty
possibilities with immense ramifications
not just for India but also globally.
July 5, 2012

6. BACKGROUND OFTHE DEAL
Jul 12, 2012, 08.23 AM IST | Source: CNBC-TV18
TVS Motors entered into an agreement with BMWs motorbike
division that is BMW Motorrad.
This agreement would be for technology sharing.
 As of now the company has said that there is no equity sell involved.
It may just start-off with a technology tie-up and then may extend to
joint marketing.
In 2012 it past 11 years sinceTVS split with its Japanese partner
Suzuki.

7. TYPE OF DEAL
Joint technical co-operation and manufacturing agreement to build
and sell bikes below 500cc.
No equity participation.
Bikes will be manufactured byTVS Motors underTVS and BMW badges
and both the partners will sell the bikes in India and overseas through
their respective distribution networks.
April 9, 2013

8. DEAL SIZE
TVS Motor will invest €20 million (approximately Rs 142 crore) in the next two
years to make motorcycles at its plant in Mysore or Hosur.
BMW will bear the cost of testing and development in Germany.The motorcycles
are expected to roll out by the end of 2015.

9. MOTIVE OFTHE DEAL
BMW
BMW sold 117,000 motorcycles in 2012,but is heavily dependent on western
markets such as US, Germany and France and has negligible presence in India.
So it wanted to enter into Indian market and thereafter spread to Asia.
TVS
OverallTVS’ market share has been slipping a whole lot. It’s lost its third slot to
Honda Motors. Its motorbike market share is just a mere 5-6%.
So with the deal company would try to gain its market share back.

10. IMPACT OFTHE DEAL
TVS
Shares ofTVS rose to Rs 42.35 a piece on the BSE following the deal.They closed up
9.93 per cent at Rs 39.85.
BMW
No current impact has been seen on BMW.

11. EXPERT COMMENTS
 The deal will be a positive forTVS from a strategic point of view as it could open
the doors for the company in international markets according to Yaresh
Kothari, analyst, Angel Broking.
 It is unlikely to result in any significant improvement in earnings or volume for
TVS in the domestic market, said the Mumbai-based analyst.
 For BMW, this deal should help gain a foothold in the Indian motorcycle market,
Kothari said.
 “It is a logical step to develop motorcycles below 500 cc for emerging markets in
Asia and South America to improve profitability.” Stephan Schaller, president
of BMW Motorrad, said.
 TVS chiefVenu Srinivasan said the company would benefit by revamping its
product line-up and developing models above 250cc.

12. CONCLUSION
 BMW will benefit from this deal as it wants to enter into the Asian markets and
reduce its dependency on the US markets.
 Much cannot be said aboutTVS but it seems that there will be some impact in
company’s growth as it can be already seen that the Deal was followed by a
rise in the share prices of the company.
 TVS now will be capable of producing bikes between 200-500cc with the use
of BMW’s technology and can compete with its rivals

13. THANK YOU