Charter International which owns the Esab Group including Esab India has received an unsolicited offer from Melrose Plc for a possible takeover for £ 1.3 billion.
Esab India Ltd is a listed firm engaged in the business of supplying a range of welding, cutting and allied products.
“Melrose Plc has approached Charter International Plc with a view to entering into discussions at possible offer for the entire issued share capital of Charter,” Charter said in a statement. Charter International termed the offer as “highly preliminary, conditional and opportunistic.”
The stock price of Esab India touched Rs 502.95 in intra-day trade at the Bombay Stock Exchange before closing at Rs 489.90 up 1.7 per cent on Friday.
A global acquisition of Charter would trigger an automatic open offer for 20 per cent in Esab India. Esab India Limited is owned 55.56 per cent by the Esab Group. At the current market price it would cost, Melrose an additional Rs 150 crore (~$ 33 million) to see through its open offer for Esab India, according to VCCircle estimates.
Esab India Limited started its operations in 1987 by acquiring the welding business of Peico Electronics & Electricals Limited (now Philips India Limited). The company continued its expansion in the Indian market with the purchase of Indian Oxygen Limited’s welding business in 1991 and Flotech Welding & Cutting Systems Limited in 1992, followed by the merger of Maharashtra Weldaids Limited in 1994.
Its products are used in industries like shipbuilding, petrochemical, construction, transport, offshore, energy and repair & maintenance.
Last year Esab India Ltd had bought its partner’s stake in the JV company in Netherlands. The company had a JV with Exelvia Holdings BV in Esab Engineering Services Ltd, in which Esab India held 24.9 per cent of the equity.