Eagers Automotive to buy remaining BYD joint venture
Key points
- Eagers Automotive entered into a binding agreement to acquire the remaining 20% stake in EV Dealer Group.
- The transaction is expected to be 5% to 5.5% earnings accretive for shareholders based on recent 12-month pro forma underlying profit.
- Buying out the non-controlling interest makes the BYD retail entity a wholly owned subsidiary.
Eagers Automotive (ASX:APE) has entered into a binding, unconditional agreement to acquire the remaining 20% interest in its BYD retail joint venture entity, EV Dealer Group, through a combination of cash and ordinary shares.
The buyout builds on the company's previous expansion in July 2023, when it raised its stake in the national BYD retail joint venture from 49% to 80%.
"This transaction will result in EV Dealer Group becoming a wholly owned subsidiary of Eagers Automotive by removing the remaining non-controlling interest associated with the business," stated the company.
The company stated that the transaction is expected to be completed by Oct. 31 and generate a 5% to 5.5% earnings accretion for shareholders based on pro forma underlying operating profit before tax for the 12 months ended June 30.
Following the announcement, the Eagers Automotive share price was up at $19.12.
The move simplifies the corporate structure of the retail joint venture while removing third-party minority interests.
The acquisition marks another step in Eagers Automotive's broader growth strategy across its Australian automotive dealership network.
