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Corporate - Mergers & Acquisitions


Federal Mogul buying Anil Nanda's stake in Goetze

Neha Kaushik

To pick up 24.64 pc stake for Rs 130 cr


Open offer unlikely
An industry observer pointed out the transaction would not spark off an open offer as this was an inter-se transfer between the two promoters.

New Delhi , March 23

American automotive giant Federal Mogul is buying out majority stake of its Indian partner, Mr Anil Nanda, in the Rs 465-crore Goetze India Ltd.

The US company would be picking up an additional 24.64 per cent in the company from Mr Anil Nanda-promoted Joint Investments Pvt Ltd for about Rs 130 crore. Following the transaction, Federal Mogul's stake in Goetze is set to go up to 50.10 per cent. The date of the proposed acquisition is on or after March 28, and the mode of the proposed acquisition is by way of inter-se promoter transfer at a price of about Rs 205-215.

According to information available on the Bombay Stock Exchange Web site, Joint Investments has a shareholding of about 27.21 per cent in Goetze. Mr Nanda's shareholding in Goetze is estimated to come down to around 2.6-3 per cent following the completion of the transaction.

Inter-se transfer

An industry observer pointed out the transaction would not spark off an open offer as this was an inter-se transfer between the two promoters.

The reasons as to why Mr Nanda, who is the Chairman and Managing Director of Goetze India, has sold off his holding in the profit-making company are not clear. Mr Nanda was unreachable for comments. An industry analyst, however, pointed out that for "anyone who wants to exit the components business, this would be the right time as the valuations are very high at present".

Mr Nanda was given controlling interest in Goetze India in January 2003 following his parting ways with elder brother Mr Rajan Nanda, Chairman and Managing Director of Escorts Ltd.

In return, Mr Nanda had to resign as Vice-Chairman of Escorts, with the condition that he would not seek reappointment. However, the differences between the two brothers remain over the sale of Escorts Heart Institute and Research Centre.

Goetze's stock price jumped 17.02 per cent on the BSE today, closing at Rs 270.25, up Rs 39.30 over yesterday's closing of Rs 230.95.

More Stories on : Mergers & Acquisitions | Automobile Components

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