Bajaj Auto has announced plans to acquire a controlling stake in Austrian motorcycle manufacturer KTM through a landmark €800 million deal, marking a dramatic shift from minority partner to majority owner. This strategic move comes as KTM faces severe financial difficulties, with Bajaj stepping in as the white knight to save one of Europe’s most iconic motorcycle brands.
A Partnership That Began 17 Years Ago
The relationship between these two companies isn’t new. Bajaj first invested in KTM back in 2007 with a modest 14.5% stake, beginning what would become one of the most successful Indo-European automotive partnerships. Over nearly two decades, Bajaj has been instrumental in KTM’s global expansion, manufacturing the Austrian brand’s motorcycles in India and exporting them to over 80 countries worldwide.
What started as a strategic partnership has now evolved into a full-scale rescue mission, with Bajaj prepared to take complete control of KTM’s operations.
KTM’s Financial Troubles Demand Urgent Action
The timing of this acquisition isn’t coincidental. KTM’s parent company, Pierer Mobility AG, entered court-supervised restructuring in November 2024 due to severe cash flow problems. The company is essentially fighting for survival, facing the very real possibility of insolvency if immediate action isn’t taken.
Adding urgency to the situation, Austrian courts have mandated that KTM must pay 30% of what it owes to creditors by May 23, 2025. Missing this deadline could trigger complete bankruptcy proceedings, potentially wiping out one of motorcycle racing’s most celebrated names.
Breaking Down the €800 Million Deal
The financial structure of this acquisition reflects both the complexity of KTM’s situation and Bajaj’s commitment to the brand’s revival. Of the total €800 million package, €200 million represents money Bajaj has already invested as shareholder debt over the years. The remaining €600 million consists of fresh funding – €450 million as a secured term loan and €150 million through convertible bonds.
To finance this massive undertaking, Bajaj has secured a ₹5,445 crore loan (approximately €566 million) from major international banks. The acquisition will be executed through Bajaj Auto International Holdings BV, the company’s Netherlands-based subsidiary, which currently holds a 49.9% stake in Pierer Bajaj AG – the joint venture that owns roughly 75% of KTM’s parent company.
What This Means for Both Companies
Once regulatory approvals from Austrian authorities are secured, Bajaj will gain operational control over KTM’s entire global business. This represents a significant milestone for the Indian manufacturer, transforming it from a domestic market leader into a genuine global player in the premium motorcycle segment.
Bajaj’s plans extend beyond mere financial rescue. The company intends to overhaul KTM’s governance structure, restart production lines that may have been affected during the crisis, and significantly expand joint development activities. Given that KTM motorcycles are already developed and manufactured in India for global export, this acquisition could accelerate innovation and reduce costs.
Impact on the Motorcycle Industry
The acquisition, once completed, will position Bajaj among the world’s largest motorcycle manufacturers by volume while adding premium European engineering capabilities to its portfolio. For KTM, it means survival, stability, and the backing of a company with proven manufacturing expertise and global reach.
The deal also ensures continuity for KTM’s global customer base and dealer network, while potentially accelerating the development of new models through Bajaj’s established R&D capabilities and cost-effective manufacturing processes.
