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Autoparts Maker Schaeffler Merges Indian Entities With Revenue Of Rs 35.7 Billion

On a proforma basis (For 12 months ending December 31, 2016) the new entity will have Rs 35.7 billion revenue, 4 plants, one R&D center and nearly 3,000 employees.

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Automotive components manufacturer Schaeffler India Ltd has approved the draft Scheme of Amalgamation for the merger of INA Bearings India Pvt Ltd and LuK India Pvt Ltd on Wednesday (30 August).

The key objective of this merger is to combine the strengths and competencies of all three Schaeffler entities in India and establish one strong listed Schaeffler entity in India in line with Schaeffler Group’s strategy “Mobility for tomorrow”.

On a proforma basis (For 12 months ending December 31, 2016) the new entity will have Rs 35.7 billion revenue, 4 plants, one R&D center and nearly 3,000 employees.

The manufacturer informed in an official statement that Schaeffler India will issue 10 equity shares to shareholders of INA India and LuK India, for every 65 equity shares held, and for every 35 equity shares held, respectively.

The company will issue 14.64 million new equity shares, thereby increasing its outstanding equity shares to 31.26 million.

Promoter group currently holds 51.33 per cent stake in Schaeffler India and 100 per cent stake in both INA India and LuK India; shareholding of Promoter group post-merger, will be 74.13 per cent.

The revenue and cost synergies are going to be realised by bundling the product offerings, leveraging distribution networks and reducing overhead costs.

As a result of this step, higher growth and margin expansion is going to create value for all stakeholders.

“This is an important milestone towards creating a single Schaeffler entity in India and increasing long term value for all stakeholders,” said Klaus Rosenfeld, CEO Schaeffler.

“This raises the corporate profile and presence of Schaeffler in India and creates an umbrella brand over three key product brands LuK, INA and FAG.”

Dharmesh Arora, Managing Director and CEO of Schaeffler India said “The merger will strengthen our position, leveraging our superior technology, quality and innovation to deliver superior solutions to our customers.”

The merger is subject to shareholders and regulatory approvals (including stock exchanges, SEBI and NCLT) and the entire process is expected to take approximately 12 months, in the ordinary course.

The Gujarat-based manufacturer registered sales of Rs 18.1 billion in 2016 and 1,525 employees.