Bajaj Auto is preparing to take a controlling stake in KTM, signaling a significant development in the global two-wheeler industry. The move, subject to regulatory approvals, marks a shift in Bajaj’s role from a long-time minority investor to a majority stakeholder in the Austrian motorcycle company, best known for its KTM, Husqvarna, and GASGAS brands.
The transition is being led by Bajaj’s wholly owned Netherlands-based subsidiary, Bajaj Auto International Holdings BV (BAIHBV), and comes at a critical time for KTM, which has been undergoing a court-supervised restructuring process in Austria due to liquidity challenges.
Strategic Shift in Ownership
Bajaj Auto currently holds an effective 37.5% stake in KTM’s parent structure through its stake in Pierer Bajaj AG (PBAG), a joint venture with Austrian entrepreneur Stefan Pierer’s Pierer Industrie AG. PBAG holds a majority in Pierer Mobility AG (PMAG), which is the listed holding company of KTM AG.
Now, Bajaj is aiming to take full control of PBAG, which would in turn give it majority ownership in KTM. The process hinges on regulatory approvals from Austrian authorities, including the Takeover Commission and Foreign Investment Control agencies. Until those approvals are secured, the existing ownership and governance structures will remain in place.
Financial Support to Facilitate Restructuring
In parallel with the proposed equity acquisition, BAIHBV has arranged an €800 million debt package to support KTM’s financial restructuring and restart operations:
- €200 million has already been infused over several tranches since FY24 to maintain basic operations during the restructuring phase.
- €600 million in additional funding is now being deployed. This includes:
- €450 million as a secured term loan to KTM AG.
- €150 million through convertible bonds issued by PBAG, with the funds eventually reaching KTM via PMAG.
These funds will help meet a key condition of KTM’s restructuring plan: a one-time payment of 30% of creditor claims, due by May 23, 2025. Failure to deposit the funds by this date would trigger a shift from self-administration to formal insolvency under Austrian law.
Background on KTM’s Restructuring
In November 2024, KTM AG and two subsidiaries entered into judicial restructuring proceedings after facing severe liquidity issues. A reorganization plan was approved by creditors in February 2025, contingent on funding being deposited with the court by late May. If all conditions are met, the Austrian court is expected to finalize the restructuring by mid-June 2025.
What’s Next?
Assuming all approvals are obtained, Bajaj plans to:
- Reorganize KTM’s governance structure, including changes to its board.
- Focus on operational turnaround and long-term financial stability.
- Expand the India-based joint development program, which currently designs, manufactures, and exports KTM motorcycles to 80 countries.
- Explore new strategic partnerships and technology collaborations.
Industry Implications
This move underscores the increasing globalization of motorcycle manufacturing and the growing role of emerging market players like Bajaj Auto in steering the direction of established European brands. While KTM continues to hold strong brand equity in the off-road and premium motorcycle segments, the success of this transition will depend on how effectively Bajaj can balance financial restructuring, regulatory compliance, and brand integrity in key global markets.
