Bajaj Auto will become the biggest shareholder in KTM which will help the company boost its worldwide vehicle business with an €800 million acquisition and growth strategy backed by debt.

According to a disclosure posted to the stock market on May 22, Bajaj Auto intends to acquire a majority interest in Austrian premium motorcycle maker KTM AG. Making this move is a key step in Bajaj’s overseas expansion of its automobile business.

Using Bajaj Auto International Holdings BV as its subsidiary, the company obtained an €800 million debt funding package. The package will allow KTM to accomplish its debt restructuring approved by an Austrian court and restart its operations and capital management. Bajaj has put €200 million into KTM as a part of the deal.

Upon obtaining approval, Bajaj Auto will transition from being a minor shareholder in KTM to controlling the majority of shares. Experts predict that this decision will strengthen Bajaj's position in the premium two-wheeler vehicle market.

KTM will move ahead in India, following the programme with Bajaj, to manufacture, sell within the country and export motorcycles to over 80 countries. As a result, India now has a stronger position in the world’s automobile market.

Bajaj Auto expects the acquisition to help it become a bigger player in the worldwide motorcycle market and to ensure they continue to focus on new ideas and high quality in automobiles.