Hero Group as well as Honda will sign a separation agreement this month

Hero Group as well as Honda will sign a separation agreement this monthHero Group as well as Honda will sign a separation agreement this month to finish their 26-yr-old partnership Hero Honda , unter this agreement the Indian partner will buy out the 26 % stake possessed by its Japanese counterpart.

Based on sources knowledgable of the development, both partners have decided that present royalty rate for each model paid to Honda will continue to be unchanged. The royalty given in 2009-2010 on an average was 2.3 % to 3 % of sales.

Additionally, Honda continues to offer technologies as well as models for the Hero Group for a transition time period, the minimum for which is until 2014 under their present partnership agreement.

The source mentioned interest of investor’s and all stakeholders of company have been provided priority during the discussions also it wouldn’t be compromised at any cost.

HeroHonda spokesperson rejected to comment. Honda said the firm and also its Indian companion “frequently hold talks regarding the future of the partnership. Nevertheless, currently, there’s nothing available to reveal.”

It is understood the HeroGroup is preparing funds to finance the acquistion of Honda’s stake.

The Hero group as well as Honda maintain 26 % each in Hero-Honda, that began operations in 1984 to turn into the world’s biggest twowheeler producer today.

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