Bharat Forge buys Federal Forge

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Mr Baba N. Kalyani
Mr Baba N. Kalyani

Our Bureau

Pune, June 25

BHARAT Forge Ltd, the flagship company of the $1.25-billion Kalyani Group, has announced the acquisition of Federal Forge Inc of the US, through its wholly owned subsidiary, Bharat Forge America Inc.

Federal Forge is engaged in the design and manufacture of complex forged steel components for the automotive industry.

Announcing the acquisition, Mr Baba N. Kalyani, Chairman and Managing Director, Bharat Forge Ltd, said that in February 2004 Federal Forge had filed for protection under Chapter 11 of the US Bankruptcy Code.

Sale of the company was concluded after successful renegotiation of the existing UAW contract.

In an all-cash deal, Bharat Forge America Inc has acquired the assets of Federal Forge, effective from June 24, 2005.

The transaction has been concluded at a value of $9.1 million. Mr Kalyani said, "The Federal Forge acquisition is a significant step towards implementing the strategy of expanding our global footprint and establishing a manufacturing presence in one of our largest markets - the US."

"Our strategy is to expand our `dual shore' manufacturing base through strategically located complementary facilities around the world."

The first step is to establish the company in Europe, while the next step is to look at North America and China. The Federal Forge acquisition will enhance the company's market presence in the US, give a strong foothold in the passenger car and light truck market and, most importantly, a manufacturing base close to some of our largest customers, he added. Established in 1962, Federal Forge is located in Lansing, Michigan. The company manufactures a variety of forged automotive components such as control arms, links, steering knuckles and connecting rods.

The company's annual turnover is about $60 million with a staff complement of 150. Its customers include ZF Lemforder (for General Motors) and Goodyear.

Bharat Forge, established in 1960, has a full service supply capability in engine and chassis components and manufacturing facilities in five locations - two in India and three in Germany.

The company had acquired the German operations of Carl Dan Peddinghaus GmbH & Co KG (now called CDP Bharat Forge GmbH) a year ago.

(This article was published in the Business Line print edition dated June 26, 2005)
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