India’s TVS Motor Buys British Norton Motorcyles
TVS Motor Company Ltd. has acquired U.K.’s iconic Norton Motorcycles in an all-cash deal worth 16 million British pounds.
“This will be one of the most interesting acquisitions of a storied motorcycle maker in recent times and will reflect TVS Motor Company’s and India’s rapidly rising prominence in the international two-wheeler market,” the Chennai-headquartered automaker said in a media statement.
Since its inception in 1898, the classic motorcycle maker Norton has seen multiple ownership changes over the years. The most recent owner was entrepreneur Stuart Garner, who attempted a revival of the brand by releasing modern versions of the Commando and Dominator motorcycles.
By early 2020, the company was shadowed by a financial crisis which saw Garner investigated by the U.K.’s Pensions Regulator over actions taken when he was a trustee of three pension programs that invested in Norton, the Guardian newspaper reported in March.
For TVS, the buyout of Norton allows it to branch out into more premium models from its current line-up of two-wheelers used by commuters. Earlier, Bloomberg had reported that TVS was considering to buy Norton.
“This transaction is in line with our effort to cater to the aspirations of discerning motorcycle customers,” Sudarshan Venu, joint managing director of TVS Motor, was quoted as saying in the statement. “We’ll extend our full support for Norton to regain its full glory in the international motorcycle landscape.”
The Storied Icon
Norton’s motorcycles have had a decorated history. The first edition of the deadly Isle of Man TT race in 1907 was won by Rem Fowler riding a Norton motorcycle. It continued to enjoy great success at the annual racing fixture and held numerous speed records. The company pivoted to producing military motorcycles during World War II but were soon back to racing after that.
The motorcycles got further recognition when a young Che Guevara rode over 8,000 kilometres across South America in 1952 on his Norton 500cc dubbed ‘La Poderosa’ or ‘The Mighty One’. The journey, chronicled in his memoir The Motorcycle Diaries would turn out to be a formative one in the life of the Marxist revolutionary. Besides, a number of Hollywood stars, most prominently Keanu Reaves count the Norton among their prized possessions. Norton’s motorcycles also shot to fame, more recently, when it was used in the 2015 James Bond film ‘Spectre’.
TVS plans to keep that identity intact. “Norton will continue to retain its distinctive identity with dedicated and specific business plans,” Venu said.
The company said it’s “excited” for Norton Motorcycles’ upcoming products, including the Commando, Dominator and V4RR. It said that “strong synergy” between the two brands can help TVS expand its global reach into new markets.
Modalities Of The Deal
For the deal, a new company named Project 303 Bidco Ltd. was incorporated and then acquired by TVS Motor’s Singapore subsidiary for 1 pound.
Following that, the subsidiary signed a purchase agreement to acquire certain assets including the “Norton” and other associated brands. The transaction will not be treated as a related party transaction, TVS said in a stock exchange filing.
Rothschild and Co. served as the financial advisor while legal assistance in the deal was provided by Khaitan & Co., and Slaughter and May.
Shares of TVS Motor Company, which have fallen 36 percent this year, closed 9 percent higher today ahead of the deal announcement.