Tube Investments,part of the USD 4.4 bn business conglomerate Murugappa Group,plans to acquire 44.1 per cent stake in industrial power transmission products manufacturer Shanthi Gears,valued at Rs 464 crore.
“Tube Investments of India has signed a share purchase agreement to acquire 44.1 per cent stake in Shanthi Gears Ltd.
“TII will be making an open offer to the extent of 26 per cent. The total cost of the acquisition,including the public offer,is expected to be Rs 464 crore assuming full response to the proposed open offer pursuant to SEBI regulation,” Tube Investments of India said in a statement.
Coimbatore based Shanthi Gears manufactures a range of products,including gears,gear boxes,gear motors and assemblies. It has been designing,manufacturing and supplying various kinds of gears and gear boxes to various industries for a variety of applications over the past four decades.
In fiscal 2011-12,the company’s total turnover stood at Rs 178 crore with a Profit After Tax of Rs 28 crore. The company has manufacturing facilities in Coimbatore spread across six units,including a foundry division,it said.
“Shanthi Gears is one of the largest organized players in India in the gears segment. Its product profile is targeted towards more of niche products and greater customer retention” Murugappa Group Vice Chairman and Tube Investments Chairman M M Murugappan said.
Shares of Tube Investments were trading at Rs 153 apiece,up 5.01 per cent over the previous close in the BSE.
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