As many as 1.2 lakh shares were traded on the BSE

The stock after remaining range-bound between Rs 210-219 from early April till early May, the stock suddenly spurted 44.63% to Rs 306.70 on 10 May from Rs 212.05 on 5 May on reports that Federal Mogul was looking to acquiring 24.64% stake in the company. From here, the stock declined to Rs 285.05 on 15 May 2006 on profit booking.

Earlier, on 23 March 2006, Federal Mogul had offered about Rs 210 to joint investments for acquiring Anil Nanda’s 24.6% stake in Goetze. The announcement had triggered a 17% surge in the Goetze scrip to Rs 270.25 on 23 March 2006. However, on 31 March 2006, Federal Mogul had announced that it had withdrawn its offer to joint investment for acquiring stake in Goetze. By that time, the Goetze scrip had already cooled off to Rs 227.90.

Federal Mogul, one of the promoters of Goetze (India) and a US auto-parts major, has acquired 62,30,000 equity shares of the company, constituting 24.64% of the equity share capital, from joint investments through its subsidiary Federal Mogul Holdings on 12 May 2006. After this acquisition, the shareholding of Federal Mogul has gone up to 50.1%.

Federal Mogul had been looking forward to increasing its holding in the company to 50.1% by acquiring the 24.64% stake held by the Anil Nanda group. The sale, according to earlier reports, was stated to take place on or after 12 May 2006 at a price of Rs 222.50 per share. The US firm intends to use the Indian company as an outsourcing hub.

The price of Rs 222.50 per share paid by the American partner is higher than Rs 210, which it had offered for the same in late March 2006. The purchase had been called off later.

The buy-out of most of the Indian promoters’ stake by the foreign promoter has raised expectation that the US-based auto parts major may use Goetze as an outsourcing hub. Federal Mogul is a leading auto-ancillary company and is very strong in the diesel vehicles segment. It supplies ancillaries to auto majors like General Motors and Daimler Chrysler.

In February 2005, Goetze had signed a technology agreement with Federal Mogul to use specific proprietary technology of the latter for manufacturing contemporary pistons.

Within the OEM segment, Goetze’s revenues are spread across all auto players including Tata Motors, M&M, Bajaj Auto and TVS.

Goetze India's product range covers piston rings, pistons, cylinder liners, light alloy castings and sintered products. The company is the largest manufacturer of pistons and piston rings in India.