Shares of Timken India and ABC Bearings rose by 7.40% to 20% at 12:01 IST on BSE after the board of Timken India on 4 July 2017, approved the amalgamation of ABC Bearings with the company.
The announcement was made after market hours yesterday, 4 July 2017.Timken India (up 7.40% at Rs 726) and ABC Bearings (up 20% at Rs 285.70).
Meanwhile, the S&P BSE Sensex was up 5.93 points, or 0.02% at 31,215.72.
As per the proposed scheme, Timken India will issue 5 equity shares for every 8 equity shares held in ABC Bearings. The transaction is expected to close in the quarter ended 31 March 2018, subject to the receipt of all approvals.
The scheme is subject to the approval of the shareholders and creditors of ABC Bearings, approval of the regulatory authorities and the sanction of the National Company Law Tribunal.
The amalgamation will help both the firms to achieve larger product portfolio, access new domestic and export markets, increase market share, economies of scale, efficiency, and other related economies. The scheme intends to merge the operations of ABC Bearings with that of Timken India to fulfill this objective.
Net profit of ABC Bearings rose 53% to Rs 4.88 crore on 0.5% decline in net sales to Rs 52.41 crore in Q4 March 2017 over Q4 March 2016.
ABC Bearings is engaged in the business of engineering, product design, manufacturing, distribution and sale of bearings.
Net profit of Timken India declined 3.5% to Rs 25.71 crore on 4.4% decline in net sales to Rs 270.44 crore in Q4 March 2017 over Q4 March 2016.
Timken India is engaged in the business of engineering and manufacturing bearings and mechanical power transmission components including gear drives, couplings, belts and chain.
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