The definitive agreements between the two companies were signed with the aim of building electric mobility solutions focused on performance, quality, reliability and sustainability.
DENSO, a global automotive technology company, will bring its technology capabilities in electrification, advanced product engineering and research and development (R&D), while Sona Comstar will contribute its engineering expertise, cost-competitive manufacturing capabilities, delivery capabilities and understanding of the Indian automotive ecosystem.
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The two companies said the joint ventures will focus on developing scalable and cost-efficient powertrain solutions for electric and hybrid vehicles. Sona Comstar and DENSO have come together with a shared vision to develop electric powertrains that establish benchmarks in performance, quality, reliability and sustainability.
The partnership will combine DENSO’s technology leadership in electrification with Sona Comstar’s manufacturing capabilities to develop and market powertrain systems across multiple vehicle segments.
The partnership will be implemented through two strategic joint ventures. One joint venture will focus on high-voltage liquid-cooled traction inverters, traction motors and generators for electric and hybrid four-wheelers and larger vehicle applications.
The other joint venture will focus on air-cooled traction inverters, traction motors and generators, and e-Axles for electric and hybrid two-wheelers and three-wheelers.
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JV for four-wheelers and commercial vehicles
Under the partnership, Sona Comstar and DENSO will establish a joint venture focused on electric and hybrid powertrain systems for four-wheelers and larger vehicle applications.
The companies have entered into a Joint Development Agreement (JDA) to develop high-efficiency liquid-cooled traction inverters, traction motors and generators for electric and hybrid passenger vehicles, commercial vehicles and other high-voltage applications.
To commercialise these products, the partners will set up a manufacturing joint venture in India. DENSO will hold a 51% equity stake in the venture and assume management control, while Sona Comstar will hold the remaining 49% stake and contribute its engineering capabilities, manufacturing expertise and supply chain ecosystem.
Separate JV for electric two-wheelers and three-wheelers
The companies will also establish a separate joint venture for electric and hybrid powertrain systems for two-wheelers and three-wheelers. As part of this transaction, Sona Comstar will transfer its existing electric traction motor and controller business for two-wheelers and three-wheelers into its wholly owned subsidiary through a slump sale.
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Following the transfer, DENSO, directly or through its affiliates, will acquire a 49% equity stake in the entity at an enterprise value of ₹17,500 million, while Sona Comstar will retain a 51% stake and management control.
Sona Comstar and DENSO will also establish a separate joint venture focused on electric and hybrid powertrain systems for two-wheelers and three-wheelers. Under this arrangement, Sona Comstar will transfer its existing electric traction motor and controller business for two-wheelers and three-wheelers into its wholly owned subsidiary through a slump sale.
After the transfer, DENSO, either directly or through its affiliates, will acquire a 49% equity stake in the entity at an enterprise value of ₹17,500 million, while Sona Comstar will retain the remaining 51% stake along with management control.
The joint venture will manufacture and develop air-cooled traction inverters, traction motors and generators, and e-Axles for electric and hybrid two-wheelers and three-wheelers. The partnership aims to expand product offerings through accelerated innovation and create opportunities to serve a broader customer base.
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Both DENSO and Sona Comstar will license their respective intellectual property and know-how to their majority-owned joint ventures against payment of royalty. The transaction is subject to receipt of relevant regulatory approvals and completion of customary closing conditions mutually agreed between the parties in the definitive agreements.
Shares of Sona BLW Precision Forgings Ltd ended at ₹726.15, down by ₹7.05, or 0.96%, on the BSE.
