ABC Bearings hits upper circuit on merger approval; Timken surges over 15%

NEW DELHI: Shares of ABC Bearings locked in upper circuit of 20 per cent on Wednesday after Timken India announced that it has entered into a definitive agreement to acquire the company through a court-approved amalgamation process.

Shareholders will receive 5 shares of Timken India for every 8 shares of ABC Bearings.

ABC Bearings advanced 20 per cent to Rs 285.70 on Wednesday, while Timen India closed the day at Rs 779, up 15.25 per cent.

ABC Bearings is a manufacturer of tapered, cylindrical and spherical roller bearings and slewing rings.

Systematix Shares in a note said, “We believe the merger will help Timken India to achieve Rs 2,000 crore domestic turnover target by 2020 from Rs 1,060 at present.”

According to the brokerage house, after the merger Timken will get access to additional capacity to meet its increasing demand. The move will also help Timken to increase market share in CV/ off-high vehicles in which ABC Bearings primarily operates.

ABC Bearings has surged over 100 per cent in the past one year. The stock hit its fresh 52-week high of Rs 285.70 in Wednesday’s trade, July 5.

In a filing to BSE, ABC Bearings said, “The transaction contemplated under the scheme is expected to close in the quarter ended March 31, 2018, subject to the receipt of approvals.”