Comments
German automotive and industrial supplier Schaeffler AG will be merging its three local entities under the listed subsidiary Schaeffler India to build a larger combined entity.
“This transaction is all about creating one strong Schaeffler entity in India by merging the two entities we have here — INA India and LuK India — into the listed Schaeffler India Ltd. The purpose of the transaction is to simplify our structure, reduce complexity and go after the significant growth potential we see in India,” Schaeffler AG CEO Klaus Rosenfeld told BusinessLine .
Schaeffler India will issue 10 equity shares to shareholders of INA India for every 65 equity shares held, and 10 equity shares to shareholders of LuK India for every 35 equity shares held. It will issue 14.64 million new equity shares, thereby increasing its outstanding shares to 31.26 million.
The promoter group, Schaeffler AG, currently holds a 51.33 per cent stake in Schaeffler India and 100 per cent each in INA India and LuK India. Post merger, it will hold 74.13 per cent of the combined entity.
The company expects the transaction to close in 12 months.
Doubling of investment Rosenfeld said the company will double its investments in India to expand its manufacturing capacity here.
“We currently invest about €20-25 million in capital expenditure in India each year (three entities combined). We will grow that to €40 million from next year onwards,” he said. “We will be expanding the plants in Talegaon as well as Sangli within six months.”
The merger will not impact employees, he added.
Leaner platform “The focus is on growth, making the whole platform leaner and simplified. We don’t see any impact on our current employee number. We think that’s a stable number. There will be changes here and there when we combine the entities and teams together but that we need to investigate.”
Schaeffler AG made revenues of about €13.4 billion last year, while the three Indian entities together earned about €400 million.
Schaeffler India has 3,000 employees across the three entities. It four manufacturing plants in India — two in Vadodara and one each in Pune and Hosur.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.