German auto component major Schaeffler AG today announced plans to merge its three group firms in India to create a Rs 3,570 crore single entity supplying parts for automotive and industrial applications.
As part of the plan, two group firms, INA Bearings India Pvt Ltd (INA India) and LuK India Pvt Ltd (LuK India) will merge with Schaeffler India Ltd.
The boards of directors of Schaeffler India Ltd, INA India and LuK India, at their respective meetings held on August 30, 2017 approved the draft scheme of amalgamation, Schaeffler AG said in a statement.
As part of the merger, Schaeffler India will issue 10 equity shares to shareholders of INA India, for every 65 equity shares held. It will also issue 10 equity shares to shareholders of LuK India, for every 35 equity shares held.
Schaeffler India will increase its outstanding equity shares to 31.26 million with the issue of 14.64 million new equity shares.
Post the merger, promoter group holding in Schaeffler India will be 74.13 per cent. At present, the promoters hold 51.33 per cent in Schaeffler India and 100 per cent in both INA India and LuK India.
Commenting on the development, Schaeffler AG CEO Klaus Rosenfeld said: "This is an important milestone towards creating a single Schaeffler entity in India and increasing long term value for all stakeholders."
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, he added.
The merger will create a leading Indian automotive and industrial supplier with about Rs 3,570 crore in revenues with nearly 3,000 employees, four plants and one R&D center, the statement said.
Schaeffler India Managing Director and CEO Dharmesh Arora said Schaeffler has operated in India for more than 50 years, growing from a bearing manufacturer to an automotive and industrial supplier.
"The merger will strengthen our position, leveraging our superior technology, quality and innovation to deliver
Superior solutions to our customers," he said.
The merger is subject to shareholders and regulatory approvals and is expected to take approximately 12 months, in the ordinary course, the company said.
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