Explained: The What, Why, And How Of Bajaj’s Takeover Of KTM AG

Bajaj Auto is poised to take full control of the Austrian motorcycle manufacturer KTM AG through a €800 million rescue package, which is directed at stabilising KTM’s financial condition in the midst of a debt restructuring process. The investment has been made through Bajaj Auto International Holdings BV, which positions Bajaj as a majority stakeholder, allowing it more operational and financial control over KTM. Part of the funding includes a secured loan of €450 million and convertible bonds worth €150 million.

This is in addition to €200 million already provided. The urgent funding is necessary to meet a May 23, 2025, deadline imposed by Austrian courts to settle creditor claims and avoid insolvency. Bajaj also seeks regulatory approval to gain control of Pierer Bajaj AG, the parent company of KTM, marking a significant shift in its nearly two-decade partnership with the brand.

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Transitioning to Majority Control

Bajaj Auto’s decision to transition from a minority shareholder to a majority stakeholder in KTM marks a pivotal shift in its nearly two-decade partnership with the brand. Previously, Bajaj held an indirect stake of 37.5 per cent in KTM through Pierer Mobility AG, its parent company. With this acquisition, Bajaj seeks to deepen its operational and financial control over KTM, reinforcing its position in the high-performance motorcycle market.

Financial Commitment and Structure

The rescue package includes a secured loan of €450 million (approximately Rs 4,365 crore) to be held in escrow until court approval in Austria. Additionally, Bajaj has committed €150 million (around Rs 1,455 crore) in convertible bonds issued by Pierer Bajaj AG, a subsidiary within the KTM group. This financial intervention builds on the €200 million (approximately Rs 1,945 crore) already provided as shareholder debt, bringing the total financial backing to €800 million (roughly Rs 7,765 crore).

The urgency of this funding stems from a May 23, 2025, deadline set by Austrian courts, requiring KTM to settle 30 per cent of creditor claims to avert insolvency proceedings. Bajaj Auto’s support ensures KTM’s operational continuity and protects its reputation as a premium motorcycle brand.

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Regulatory Approvals and Future Plans

In addition to the immediate financial assistance, Bajaj Auto is pursuing regulatory approval to acquire a controlling interest in Pierer Bajaj AG, which owns a significant stake in KTM. This move is expected to stabilise KTM’s operations and facilitate a comprehensive turnaround strategy that includes reconstituting the board and governance structure at KTM, enhancing product development collaborations between India and Austria, and exploring new partnerships to drive technological advancements.

With the necessary approvals, Bajaj Auto is poised to play a transformative role in shaping the future of KTM, reinforcing its commitment to the brand and the premium motorcycle segment globally. This acquisition underscores Bajaj’s ambition to establish itself as a leading player in the international two-wheeler market while ensuring the long-term viability of KTM amidst its restructuring efforts.