TVS has acquired the legendary British motorcycle brand, Norton, for GBP 16 million (Rs 153 crore).
TVS Motor Company has just announced that it has acquired Norton Motorcycles in an all-cash deal for a consideration of GBP16 million (Rs 153 crore). The Indian two-wheeler giant has done so by acquiring certain assets of Norton Motorcycles (U.K.) Limited (which isin administration) through one of TVS Motor’s overseas subsidiaries.
Commenting on the acquisition, Sudarshan Venu, joint managing director, TVS Motor Company said, "This is a momentous time for us at TVS Motor Company. Norton is an iconic British brand celebrated across the world and presents us with an immense opportunity to scale globally. This transaction is in line with our effort to cater to the aspirations of discerning motorcycle customers. We will extend our full support for Norton to regain its full glory in the international motorcycle landscape."
Venu further added, "Norton will continue to retain its distinctive identity with dedicated and specific business plans. TVS Motor will work closely with customers and employees in building the success and pre-eminence of the Norton Motorcycles brand and we look forward to growing together globally in the years to come."
TVS has also said that it is confident of the strong synergy between both the brands. This move will provide Norton Motorcycles its best opportunity in years for a strong resurgence and the British company can leverage TVS Motor Company’s global reach and supply chain capabilities to expand to new markets.
Norton has had a troubled history. Recently, insufficient cash flow is said to be one of the reasons why Norton Motorcycles had trouble fulfilling their order book. The company's previous owner, Stuart Garner, is also reportedly under investigation for a number of counts of fraud. While Norton's limited-edition V4 SS sold out rapidly despite the huge GBP 44,000 (Rs 40.88 lakh) asking price, the funding required to source parts and build these high-end motorcycles at the company’s Donington Hall factory wasn’t there.
Norton had also invested money into new mid-capacity, parallel-twin models called the Atlas Nomad and Ranger. These models were going to be high-volume products for the company, but Norton hasn’t managed to finish the expanded space in the factory that was needed for their production. The big news with the 650 twins was that Norton had signed a deal with Pune-based Kinetic Engineering to locally manufacture those products in India for Asian markets. How things progress in that regard, now that TVS has taken over, will be interesting to see, but it's quite obvious that TVS will want to keep all projects in-house. Meanwhile, MotoRoyale, the Kinetic Engineering-owned business that deals with high-end motorcycles is beleaguered with problems of its own.