Sandvik Asia May Merge Kanthal, Steel With Itself

Swedish engineering major Sandvik Asia proposes to merge Kanthal India and Sandvik Steel Asia with itself. The company has called a meeting of its board of directors on December 4 to consider the proposal.

A company spokesperson said: "The move is aimed at consolidation of all Sandvik companies in India. The merger would help in synergising the various technical, managerial and financing arrangements of the companies involved."

Kanthal India is a subsidiary of Kanthal AB, which holds 66 per cent of the equity. The balance 34 per cent is held by the Indian public. The company is listed on the Bombay and Bangalore stock exchanges. However, the shares of the company are quite thinly traded on the exchanges and the volumes are not very significant.

 

Kanthal AB in turn is held 100 per cent by Sandvik AB Sweden, while Sandvik AB has a 89 per cent stake in Sandvik Asia.

The other company to be merged with Sandvik Asia, Sandvik Steel Asia, is held 100 per cent by the Sandvik group which comprises Sandvik AB and other companies in the Sandvik fold.

The Sandvik group has been in a major restructuring exercise , possibly aimed at the elimination of cross holding by the various group companies.

Earlier this year, the Sandvik Asia board had approved the merger of Titex India (P) Ltd, a Sandvik group company with itself. Sandvik Asia held 24.99 per cent in Titex India before the merger.

Sandvik AB, also acquired 49 per cent shares held by Chokshi Tubes Company in the joint venture Sandvik Chokshi, an extrusion facility for the making of stainless steel tubes. The 49 per cent stake was acquired in a Rs 25 crore deal which resulted in the joint venture becoming a wholly owned subsidiary of Sandvik AB.