SKF Announces Plan to Acquire SNFA

SKF AB (Sweden) made a surprise announcement that it will acquire French bearing manufacturer SNFA S.A.S. (Societe Nouvelle de Fabrication Aeronautique) and in fact already has a signed Memorandum of Understanding to that effect. The acquisition is all the more surprising because two previous attempts by INA/FAG to acquire SNFA were blocked, in response to anticompetitive complaints filed by SKF, among others. France is also in the grips of an "economic patriotism" movement, which has stirred EU and international criticism for obstructing foreign acquisitions of French companies. In early 2002, FAG Bearing (now a division of Schaeffler Holding / INA Bearing, Germany) was in negotiations to acquire SNFA, but found its overtures rejected by the oversight and competition authorities in Germany. Abandoning the first attempt in late 2002, it tried again in early 2003, only to give up in the face of a likely rejection by the European Commission. According to eBearing's sources in both the German and French governments, SKF was the primary complainant and provided much of the information that led the authorities to block the deals. SNFA was founded in 1952, but some of its production dates back to 1919 and the dawn of the commercial aircraft and aerospace industry. Today, SNFA is a leading manufacturer of angular contact ball bearings, spherical roller bearings and cylindrical roller bearings for aircraft, aerospace, precision industrial and machine tool applications. In 1979, SNFA built its current 15,000 square meter aircraft and aerospace bearing facility in Valenciennes. Over 425 production workers are in Valenciennes. It also has a high-precision ball bearing manufacturing plants, Somecat SpA, near Turn, Italy and SNFA Bearing Ltd., at Charfield, in Gloucestershire, UK. Together, they employ another 275 workers. A 2003 expansion doubled the Somecat plant, to over 6,500 square meters. The Valenciennes plant produces aerospace bearings from 4mm bore to 800mm OD, has an on-site cryogenic treatment facility, and an ASTM Class 1000 clean room for assembly. Somecat and Charfield produce high precision angular contact ball bearings; Somecat from 6mm to 65mm ID, Charfield from 65mm to 280mm ID. In its announcement, SKF said SNFA's 2004 sales were approximately