Hero Cycles Ltd, the bicycle manufacturing unit of Hero Motors Company, has acquired a stake in German premium e-bike maker HNF Nicolai as part of its move to capture a share of the global market.
The company bought the stake along with German investment trust IBG Beteiligungsgesellschaft Sachsen-Anhalt mbH, which is an investment vehicle for the state of Saxony-Anhalt. Hero Motors also participated in the acquisition, Hero Cycles said in a statement.
The company didn’t disclose financial details of the transaction.
Hero Cycles and HNF will together seek to become a full-range supplier for e-bikes in European markets. Hero said the acquisition of the German firm is in line with its objective of achieving a 5% market share by 2022.
The bike manufacturer said it will strengthen HNF by investing in its design, brand building, distribution and supply chain capabilities. Hero Motors Company will also establish HNF as its global centre of excellence for electric bikes with its Berlin-based research and development centre.
The company will leverage HNF’s expertise in e-bike design and engineering strength for the e-bike and bicycle businesses in global markets, Hero Cycles added.
After Germany, the largest e-bike market in Europe, Hero Cycles will expand its footprint in the European Union with more acquisitions and partnerships.
HNF was founded as HNF Heisenberg in 2008 and was established by Michael Hecken, Kalle Nicolai and Benjamin Börries. It manufactures and sells a range of e-bikes that are powered by carbon belts instead of traditional bicycle chains. It was renamed to HNF Heisenberg and Nicolai, before finally changing to HNF Nicolai.
Ludhiana-based Hero Cycles, which was incorporated in 1966, says it has a manufacturing capacity of 7.5 million bicycles per year. It has manufacturing units in Ludhiana, Bihar’s Bihta and Uttar Pradesh’s Ghaziabad.
The company has also made other acquisitions in the bicycle segment. In August 2015, it agreed to acquire a controlling stake in the UK-based cycle distributor Avocet Sports Ltd, a move that marked its entry into Europe. In March 2016, it announced the acquisition of a 60% stake in Sri Lankan bicycle manufacturer BSH Ventures.