General Motors Co., the largest U.S. automaker, has almost completed a deal to sell its Nexteer Automotive steering-parts unit, said Kim Carpenter, a GM spokeswoman. She declined to name the remaining bidders.
GM acquired Nexteer from Delphi Corp. last year and is selling the steering business because it is deemed to be a non- core asset. A deal may be announced as soon as today, said two people familiar with the matter. The price may be about $450 million, said one of the people, who asked not to be identified because the talks are private.
Selling Saginaw, Michigan-based Nexteer will allow GM to focus on engineering core parts of the car, like engines and transmissions, while outsourcing smaller systems to parts suppliers, said Mike Wall, an analyst with IHS Automotive, a research firm based in Lexington, Massachusetts.
“GM doesn’t need to be the expert in steering,” Wall said. “They can buy that from someone else. For some of these Asian parts companies, it makes sense to get into other parts businesses.”
Nexteer had $2.1 billion in revenue in 2008, almost half of it from GM. The unit has 6,200 employees, 22 manufacturing sites and 60 global customers. GM said in January it would sell the steering unit.
The automaker bought the business from Troy, Michigan-based Delphi as GM’s former parts unit emerged from bankruptcy in October. Detroit-based GM exited its own bankruptcy in July 2009, with the U.S. government holding a 61 percent stake.
GM is preparing for an initial public offering that may sell 20 percent of the Treasury’s stake, reducing the U.S. to a minority owner, two people familiar with the plan said last month.
GM, which spun off Delphi in 1999, bought back the global steering business and factories in Wyoming, Michigan; Kokomo, Indiana; and Rochester and Lockport, New York.