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FAG fights INA`s €670m takeover bid

01 October, 2001

German bearing-maker FAG Kugelfischer is trying to fend off a takeover bid by its compatriot, INA. Privately owned INA launched its bid in early September, offering a 51% premium on the pre-bid share price in the publicly quoted FAG, valuing it at €670m (£420m).

FAG is currently in fourth place in the global bearings league (behind SKF, NSK and NTN). A merged operation could leap into the second slot, with annual sales of €6.4bn (£4bn) and 52,000 employees.

There is reportedly little overlap between INA and FAG. INA focuses on tailor-made bearings particularly for the automotive industry, while a third of FAG`s sales are standard products. INA concentrates on the German market, while FAG has been building its global business and has been co-operating with Japan`s NTN.

One of the attractions of the deal from INA`s point of view is that it would decrease its reliance on the German automotive sector. In a letter trying to persuade his shareholders to reject the INA approach, FAG chief executive Dr Uwe Loos described his rival as "a family-owned company with a primarily regional focus, and a one-dimensional emphasis on the automotive industry".

He said that the INA offer "lacks a clear strategy" and that the merger "would have a negative effect for shareholders, employees and customers of FAG".

But as Drives & Controls went to press, INA was reported to have secured almost 20% of FAG`s shares and it appeared likely that it would win the battle although it was possible that FAG`s Japanese partner NTN or America`s Timken might step in as a "white knight".

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