Bajaj Auto’s Bold Move: Taking the Helm of KTM in a ₹7,800 Crore Deal

Bajaj Auto, under the leadership of Rajiv Bajaj, is poised to take full control of Austrian motorcycle giant KTM in a landmark deal worth ₹7,800 crore (€800 million). This strategic acquisition transforms Bajaj from a minority investor to the majority stakeholder, signaling a new era for both companies. Executed through its Netherlands-based subsidiary, this move aims to stabilize KTM’s finances, revitalize its operations, and cement Bajaj’s dominance in the global premium motorcycle market.

A Strategic Leap for Bajaj Auto

Bajaj Auto announced its plan to acquire a controlling stake in KTM on May 22, 2025, through a stock exchange filing. The Pune-based manufacturer, known for its motorcycles and three-wheelers, has been a key partner to KTM since 2007, when it acquired a 14.5% stake. Over the years, Bajaj increased its indirect ownership to 37.5% through a complex structure involving Pierer Bajaj AG (PBAG) and Pierer Mobility AG (PMAG), KTM’s parent company. Now, Bajaj is set to take charge by securing a majority stake in PBAG, giving it operational control over KTM’s global business, pending regulatory approvals in Austria.

The acquisition is facilitated through Bajaj Auto International Holdings BV (BAIHBV), its wholly owned Dutch subsidiary. BAIHBV currently holds a 49.9% stake in PBAG, which owns approximately 75% of PMAG, the listed entity overseeing KTM, Husqvarna, and GASGAS brands. This deal marks a significant shift, positioning Bajaj as the driving force behind one of the world’s leading high-performance motorcycle brands.

Financial Lifeline for KTM

KTM has faced severe financial challenges, entering court-supervised restructuring in November 2024 due to liquidity constraints and mounting debts. In February 2025, KTM’s creditors approved a restructuring plan requiring a 30% one-time payment of claims by May 23, 2025, to avoid insolvency. Bajaj’s ₹7,800 crore (€800 million) funding package is designed to meet this critical deadline and breathe new life into KTM’s operations.

The financial commitment includes:

• €200 million: Already infused as shareholder debt in multiple tranches during FY24 and April–May 2025.

• €450 million: A secured term loan to KTM AG to settle creditor dues and restart production.

• €150 million: Convertible bonds issued through PBAG to support operational revival and working capital.

These funds, deposited in court-supervised escrow accounts, will ensure KTM meets its obligations and resumes manufacturing, with the Austrian court expected to finalize the restructuring by mid-June 2025.

Strengthening a Long-Standing Partnership

Bajaj and KTM’s partnership began in 2007, with Bajaj’s Chakan plant in Pune producing KTM’s small and mid-capacity motorcycles for domestic sales and exports to over 80 countries. This collaboration has been instrumental in making KTM a household name in performance biking. The acquisition strengthens this synergy, with Bajaj planning to enhance joint development efforts, particularly in India, where KTM bikes are designed and manufactured.

“This move reflects our unwavering commitment to KTM’s legacy and the premium motorcycle segment,” said a Bajaj Auto spokesperson. “We’re not just saving KTM; we’re setting it up for a stronger, more competitive future.”

Strategic Goals and Global Ambitions

Bajaj’s acquisition is more than a financial rescue—it’s a bold step toward global leadership in the high-performance motorcycle market. The company aims to:

• Revamp Governance: Restructure KTM’s management to restore stakeholder confidence and streamline operations.

• Boost Production: Restart KTM’s stalled manufacturing lines, which faced disruptions due to supply chain issues and financial constraints.

• Expand Innovation: Deepen joint R&D efforts, potentially exploring electric mobility alongside KTM’s traditional strengths in off-road and street bikes.

• Strengthen Global Presence: Leverage KTM’s premium brands (KTM, Husqvarna, GASGAS) to compete with rivals like Hero MotoCorp and TVS in international markets.

By taking control, Bajaj aims to elevate KTM’s brand value and ensure long-term growth, aligning with its strategy to dominate the premium two-wheeler segment worldwide.

Regulatory Hurdles and Next Steps

The acquisition awaits approval from Austrian authorities, including the Austrian Takeover Commission, Foreign Investment Control, and Merger Control bodies. Bajaj Auto will also seek shareholder approval through a postal ballot. If approved, the deal will solidify Bajaj’s influence over KTM’s global operations, from its main plant in Austria to assembly facilities in China, Brazil, and the Philippines.

Why This Matters

KTM’s financial distress, compounded by its 2024 bankruptcy filing and production halts, threatened its legacy as a premium motorcycle manufacturer. Bajaj’s intervention not only saves jobs and preserves KTM’s reputation but also positions India as a growing force in the global automotive industry. With over 1 million KTM motorcycles produced at Bajaj’s Chakan facility, this acquisition underscores the strength of their partnership and India’s manufacturing prowess.

Looking Ahead

As Bajaj Auto takes the reins, KTM is poised for a turnaround. The infusion of funds and strategic oversight will help KTM navigate its challenges and reclaim its position in the competitive motorcycle market. For Bajaj, this is an opportunity to solidify its global footprint and drive innovation in performance biking. Riders and industry watchers alike will be eager to see how this iconic brand evolves under Bajaj’s leadership.

Ride on, Bajaj and KTM—together, you’re set to redefine the road ahead!