Brave Indian David hinders the Global Goliaths

Indian business houses are really becoming sturdy competitor on every business front at all level, and no business community can afford to neglect it. The very recent example can be seen in a tiny story quoted in business news. Though the tale was not much big but the focal point of it, Revathi Equipments an Indian company, is making it very hard for biggies like Atlas Copco & Ingersoll rand. The two global giants were about to close a potential business deal successfully which went into woods because of strong protest made by a comparatively small Indian business house. Let’s take a closer look.

The projected arrangement

Atlas Copco AB, based in Stockholm, Sweden, has inked a contract with Ingersoll-Rand to get hold of Ingersoll-Rand Drilling Solutions, a business within the Ingersoll-Rand Infrastructure sector. It has a turnover of roughly USD300 Mn and 950 head counts. The purchase price is USD225 Mn, to be paid in all cash. The transaction, which is anticipated to be accomplished in the second quarter of present year, at present is subject to a variety of approvals.

Three entwined angles

Atlas Copco	Ingersoll Rand
At Present
• Market leader in underground drilling segment	• Strong hold in surface drilling segment (USA)
After Deal
• The new product range to expand in a harmonizing open pit mining market which is a perfect strategic fit. • Strengthened aftermarket channels & superior geographical exposure. • Well equipped solutions to serve the customers in a better manner.	• Enhance the focus to core business segments like security and safety, climate control, industrial and energy solutions, compact equipment and road development. • Free the investment blockage, which can be better, utilized to grab relevant opportunities.

Renaissance groupa third angle

• The A H Dalmia-owned Renaissance group bought Revathi Equipment, a drilling equipment solution provider, in 2002 from Atlas Copco for Rs 29.95 crore. • A non-rivalry contract was the accord between Renaissance group & Atlas Copco during the deal. • In case of Atlas Copco getting hold of Ingersoll-Rand’s drilling solutions business in India, the agreement will be breached.

From Atlas copco’s perspective

The purchase is to enhance the product range of Atlas Copco in expanding in a matching business segment of above surface mining opined Björn Rosengren, senior executive vice president, Atlas Copco Construction and Mining Technique.

Ingersoll Rand’s viewpoint

According Herbert L. Henkel, who occupies the apex of Ingersoll-Rand the deal is supposed to perk up the knack of the company to invest in opportunities that enhance the core product lines and geographic reach, predominantly in the growth markets. The company is clearly transforming its celebrated business profile. The Drilling Solutions segment, which is related to company’s origins in 1871, has been a cherished contributor to Ingersoll-Rand's accomplishment. This segment manufactures drilling equipments and frills for the international construction, mining, quarrying, and water-well drilling industries.

The new endeavor with quicker glance
The new division is proposed to be named Atlas Copco Drilling Solutions. Meanwhile initially, the Ingersoll-Rand brand on Drilling Solutions products will be visible.

Robert Fassl has been appointed head of this novel venture Atlas Copco Drilling Solutions division. Fassl who is associated the Group since 1982 brings with him a immense experience through various positions that he had attained, including general manager, service manager, supply manager, production and purchasing manager, in North America, Sweden and Great Britain.

Revathi equipments, an Indian company adding novel direction to the deal

The dream boat of Atlas Copco’s global acquisition of Ingersoll-Rand’s drilling solutions business has faced bad weather before it begins its sail. The wind was blown by the stay order issued by Bombay High Court in the light of petition filed by Revathi Equipment, a Renaissance group company. The issue would be resolved only after March 25.