Bharat Forge is in advanced negotiations to acquire German major ThyssenKrupp's forgings unit in the US. The acquisition, if it fructifies, will take Bharat Forge, currently the world's second largest forgings company, a step closer to Thyssen, which is the world's largest.
When contacted, Amit Kalyani, executive director of Bharat Forge, said he did not want to comment on the issue. But sources close to the developments said a deal to this effect could be announced soon.
Bharat Forge has already bought companies in the UK, Germany, the US and China, where it owns the largest one. This will be the fourth overseas buyout of the Pune-based company in two years.
Over the past two years, Bharat Forge had acquired Imatra Kilsta AB, Sweden, along with its wholly owned subsidiary Scottish Stampings; Michigan-based Federal Forgings for nearly Rs 40 crore (Rs 400 million) and a German aluminium forging maker.
In December 2005, it had entered into a joint venture with the Chinese automotive major FAW Corporation. Bharat Forge now owns 52 per cent in FAW Forge, the forging division of FAW Corporation.
Bharat Forge had set a target of annual sales exceeding $1 billion by 2008, which would help it overtake ThyssenKrupp to become the biggest in the global market. The company has manufacturing facilities at eight locations: two in India, three in Germany, one each in Sweden, Scotland and North.
The recent Chinese joint venture had given Bharat Forge a foothold in the cheapest forging market of the world. China is a very large player with a market for 5 million vehicles, growing at 11 per cent annually.
In the next five years, the market size will be 10 million.
FAW Forge, which has its manufacturing facility at Changchun in northern China, has a 1,700-strong workforce. Its parent company, FAW Corporation, is the largest automobile manufacturer in China, making one million vehicles every year, which is equal to the entire Indian automobile industry.
FAW Corp makes 500,000 passenger cars for itself and global car firms, including Volkswagen, Audi and Toyota, and generates $14 billion annually.
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