Gujarat-based gear manufacturer Elecon Engineering Company, is in advanced stages of negotiations to acquire the industrial gears division of Germany-based engine components maker Renk AG. |
The products of the industrial gears division have special usage in the cement industry. |
"If talks materialise, Elecon should complete the acquisition in the next few months,"said sources close to the company. Officials at Elecon, however, declined to comment. |
The company's strategy through acquisitions is to be a highly specialised gear maker, catering to niche sectors such as the cement and sugar industry, said sources. |
It also aims to acquire other Europe-based industrial gear makers, they said. The $375-million Renk AG's principal activities include design and manufacture of engine components. |
The group operates through five divisions - gears unit, vehicle transmissions unit, sleeve bearings unit, special engine components and test systems. Last year, the firm registered a net profit of $15 million. |
Renk's gears division at Rhein could be further categorised as industrial gears unit, spur gear unit, planetary gear unit, and marine reversing gear units. |
The group earns 18 per cent revenue via the gear business. The Renk AG group has subsidiaries in France, the US, Turkey, Brazil and United Arab Emirates. It employs more than 1,500 people. |
Elecon is a licensee of Renk in India, already supplying gears and related technology of the firm to Indian customers. The company has a domestic market share of 31 per cent in industrial gears. |
It makes and exports 70 different varieties of industrial gears, including posired 2 helical, bevel helical, super NU worm and helical gear, fluid, geared and flexible couplings and planetary gearbox. |
The Indian company also has a materials handling equipment business. For the year ended March 2006, Elecon reported a net profit of Rs 27 crore, a growth of 169 per cent compared to Rs 10.03 crore, in the previous year. |