Minority shareholders have agreed to a court-ordered settlement, formally bringing to a close the 18-month saga of INA Holding KG's (Germany) acquisition of FAG Kugelfischer Georg Schaefer AG (Germany). The acquisition creates the world's second-largest bearing manufacturer behind Sweden's SKF.

Privately-held INA launched its hostile bid for publicly-traded FAG in September 2001. Then trading around € 6 per share, INA offered € 11 per share, an offer which FAG characterized as "inadequate" and prompted the company to launch a series of anti-takeover actions.

Within two months, however, INA had acquired approximately 90% of FAG's outstanding shares, a pace that accelerated when INA upped its offer to € 12 per share.

At the end of 2001, a new German securities law went into effect. Under the new law, when one entity owns more than 95% of a publicly-traded stock, it can force those holdout minority shareholders to sell their shares. After acquiring approximately 95% of FAG's outstanding shares, INA faced a tough contingent of minority shareholders who refused to tender their shares at the offered € 12 per share.

In October 2002, FAG's minority shareholders again rejected the € 12 per share offer, and ended up settling the matter in court.

In the court-ordered settlement, INA will pay FAG's remaining dissident shareholders the original € 12 per share plus 15%, or € 1.80, for a total of € 13.80 per share.

Cumulatively, the holdout shareholders controlled approximately 3.1 million shares; INA's cost of settling for the extra € 1.80 per share amounted to € 5.6 million (USD $6 million).