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US, Singapore firms ‘eye Indian motorbike maker’

February 1, 2011

SINGAPORE: US private equity firm Bain Capital and the Government of Singapore Investment Corp (GIC) are nearing agreement to buy a minority stake in Indian motorcycle-maker Hero Honda, the Financial Times reported today.

The newspaper, quoting anonymous sources familiar with the matter, said the expected transaction could be worth up to US$1.75 billion.

The stake will be from the Munjal family, which controls Hero Honda.

Last year, Japan’s Honda Motor sold its 26% stake in the Indian firm to the Munjal family at a steep discount, the Financial Times said.

India, the world’s second most populous nation, is a major market for motorcycles, and last year Hero Honda produced nearly five million of them, the report said.

GIC is one of Singapore’s two sovereign wealth funds – along with Temasek Holdings – and invests the country’s massive foreign reserves of well over US$100 billion.

It does not publicly give a value on its holdings but the US-based Sovereign Wealth Fund Institute ranks it as the seventh largest in the world with an asset portfolio valued at US$247.5 billion.



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