Hero Cycles acquires German bicycle firm MIFA

Hero Cycles announced the acquisition of Mitteldeutsche Fahrradwerke (MIFA), a German bicycle firm listed on the Frankfurt Stock Exchange with revenues of around Rs 798 crore. This deal is seen as the first-ever collaboration between Indian and European firms in the bicycle world.

Commenting about this deal, Pankaj Munjal, Co-Chairman Hero Cycles, said in a statement, “This partnership with Hero Cycles will allow both companies to synergise their operations and respective strengths, to provide a powerful combination in the global bicycle industry.It’s a complex transaction structure and needs several approvals in Germany – we are hopeful of achieving transaction closing in about six months.”

This deal struck between the two bicycle manufacturers will enable Hero to get access to Mifa’s high-end technology, especially in the e-bikes space, as well as critical markets such as Europe where it has robust presence.

MIFA specialises in the mass market bicycle segment with large retail chains such as Aldi and Metro on its roster and had recently forayed into the ebikes segment with its ‘Grace’ brands.

However, the company has been under debt and is lagging to pay its creditors. Hero Cycles, controlled by the OP Munjal Group, is looking at turning around the company with the help of a consultancy firm.

Incorporated in 1956, Hero Cycles Limited is the largest cycle manufacturer in the world. The company has a manufacturing capacity of 75 lakh bicycles per year, with its unit in Ludhiana (Punjab), Bihar and Ghaziabad. 

The company has highly integrated plant in Ludhiana which produces 19,000 cycles everyday. It also manufactures automotive rims and various other auto components. The company produced 55 lakh bicycles in the financial year 2014 and sales of Rs 2,000 crore.