With the proposed acquisition of industrial gear maker Shanthi Gears, bicycle manufacturer Tube Investments is all set to enter the industrial power transmission segment.
Shanthi Gears was founded by reputed 'gearman' P Subramanian of Coimbatore.
The acquisition, would be concluded in two parts - 44.1 per cent from the promoters and 26 per cent through open offer. The total consideration would be Rs464 crore, the company, a part of the Rs22,000 crore Chennai-based Murugappa Group, said yesterday.
L Ramkumar, managing director, Tube Investments of India said the company was working out the modalities of funding the acquisition and would close the deal within a few weeks.
According to to Ramkumar the company needed to grow the 25 per cent of its non-auto portfolio substantially and Shanthi gave it the leverage in doing that.
The company with a product line comprising products such as gears, gear boxes, geared motors and gear assemblies, has complete backward integration. It also fits synergistically with the industrial chains business of Tube Investments.