EuroGroup Laminations plummets on the stock market after the stop of the Ems-FountainVest deal
The stock first failed to make a price and then opened in the deep red, down more than 50 per cent. It was not possible to obtain the Indian authorities' approval for foreign direct investment, which was one of the conditions precedent for the completion of the deal. Takeover bid for delisting blows up
(Il Sole 24 Ore Radiocor) - First it fails to make a price, then it goes into trading and collapses by more than 50%. A session to forget for EuroGroup Laminations (Egla) after the transaction with FouintainVest, an Asian private equity company, which intended to acquire a majority stake in the Italia manufacturer of electric motor components, fell through. In particular, it was not possible to obtain the approval of the Indian authorities for foreign direct investment, which was one of the conditions precedent for the completion of the deal. The assets in India relate to Egla's 40% stake in Kumar, which was acquired in August 2024 for about EUR 20 million.
Rewinding the tape of the transaction, in July 2025 Ems Euro Management Services had agreed to sell its 45.7% stake in EuroGroup Laminations to an investment vehicle owned by the Hong Kong-based fund for €3.85 per share. Under the terms of the agreements, Ems would then reinvest 50% of the sale proceeds in a new holding company set up with FountainVest to own EuroGroup. FountainVest had also concluded an agreement to acquire Tikehau Capital's 7.9% stake in the Italia group at the same price, meaning that at the closing of the deal, which was scheduled for the first half of 2026, the new holding company would hold 55.3% of the voting share capital. Thereafter, according to plans, a public tender offer would be launched on the remaining shares, again at EUR 3.85, for a valuation of the company of EUR 626 million, with the aim of delisting it. On the day the deal was announced, the EuroGroup Laminations share price had gained 52.62% to EUR 3.56 per share, bringing it in line with the proposed purchase price.But today came the stop.
According to Egla's disclosure, the proceedings initiated with the Indian foreign direct investment licensing authority were discontinued due to 'complexities that arose during the process'. Ems and FountainVest then commenced and conducted negotiations to identify alternative solutions that could also allow the transaction to be completed in compliance with Indian regulations while minimising the impact on the shared business plan, including the possibility of a spin-off of the group's Indian subsidiary. However, these negotiations were unsuccessful and the agreement signed in July between the parties was terminated. Egla, which is not a party to the contractual agreements between Ems and FountainVest and was not involved in the talks held regarding the impossibility of proceeding with the transaction, emphasises that "the termination of the transaction does not affect the industrial and financial outlook of the company", which in fact confirmed the group's development lines and medium-long term prospects.
