The Board of Directors of Schaeffler India Limited (formerly FAG Bearings India Limited), INA Bearings India Private Limited (“INA India”) and LuK India Private Limited (“LuK India”), at their respective meetings held on August 30, 2017 approved the draft Scheme of Amalgamation for the merger of INA India and LuK India into Schaeffler India Limited (the “Scheme”).

Key highlights of the Scheme

• Schaeffler India Limited will issue 10 equity shares to shareholders of INA India, for every 65 equity shares held.
• Schaeffler India Limited will issue 10 equity shares to shareholders of LuK India, for every 35 equity shares held.
• Schaeffler India Limited will issue 14.64 million new equity shares, thereby increasing its outstanding equity shares to 31.26 million.
• Promoter group currently holds 51.33% stake in Schaeffler India Limited and 100% stake in both INA India and LuK India; shareholding of Promoter group post-merger, will be 74.13%.

Transaction rationale

• Creating a leading Indian Automotive and Industrial supplier with about INR 35.7 billion in revenues and nearly 3,000 employees
• Establishing a diversified product offering across the high growth Automotive and Industrial segments
• Realizing revenue and cost synergies by  bundling the product offerings, leveraging distribution networks and reducing overhead costs
• Higher growth and margin expansion to create value for all stakeholders

The key objective of this merger is to combine the strengths and competencies of all three Schaeffler entities in India and establish one strong listed Schaeffler entity in India in line with Schaeffler Group’s strategy “Mobility for tomorrow”.  On a proforma basis (For 12 months ending Dec 31, 2016) the new entity will have INR 35.7 billion revenue, 4 plants, one R&D center and nearly 3,000 employees.

“I am very pleased that the Board of Directors of Schaeffler India Limited, INA Bearings India Private Limited and LuK India Private Limited have given their approval to merge the three companies. This is an important milestone towards creating a single Schaeffler entity in India and increasing long term value for all stakeholders”, said Mr. Klaus Rosenfeld, CEO Schaeffler AG. “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.”

Mr. Dharmesh Arora, Managing Director and CEO of Schaeffler India 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.”

The merger is subject to shareholders and regulatory approvals (including stock exchanges, SEBI and NCLT) and the entire process is expected to take approximately 12 months, in the ordinary course.