FAG Kugelfischer Georg Schaefer AG (Schweinfurt, Germany), in the midst of a hostile takeover bid from INA Holding, has acquired two companies and is reportedly in negotiations with a third.

Last week, FAG Holding USA acquired privately-held SMSI International Inc. (West Bloomfield, Michigan). SMSI, a small company with 30 employees and sales of under USD $3 million, manufactures high-precision machine tool spindle bearings. FAG Holding USA paid $2 million for the company.

"This is not a major acquisition, but it's a further step in our strategy to focus on high-precision bearings," said a spokesman.

SMSI will be rolled into FAG subsidiary Pope Corp. (Haverhill, Massachusetts), an 80-year-old manufacturer of precision machine tool spindles for drilling, milling and grinding. Pope also repairs and upgrades old spindles at four service centers in the U.S.

Within Pope, SMSI will take over all component bearing production, while existing Pope operations will re-focus on new product development and assembly. Transferring Pope's air bearing production was not mentioned.

Producing high-speed, high-precision spindle bearings is a challenge, as the bearings must be robust, often custom manufactured, turn at extremely high speeds and with tight tolerances (roundness, for example, to .0001").

FAG's second acquisition last week was Spanish assembly specialist Profit Team, acquired by the company's German subsidiary FAG Production Systems GmbH. The purchase price was reportedly 12 million Marks ($5.5 million).

According to German media, FAG is also intent upon closing a major acquisition this week, perhaps involving a large bearing manufacturer with sales in the $100 million range.

No further details were available, but FAG indicated there would be more information in a news conference scheduled for this coming Friday, October 12, 2001.