North America’s biggest auto-parts maker Magna International Inc. agreed to sell its car-interiors business to Spanish rival Grupo Antolin, which is seeking to become the world’s largest supplier of vehicle interiors.
The deal, which doesn’t include Magna’s seating business, includes 36 manufacturing operations and about 12,000 employees in Europe, North America and Asia, Magna, which is based in Aurora, Ontario, said in a statement Thursday. Total sales for the operations included in the agreement were about $2.4 billion last year, it said.
The transaction is expected to close in the third quarter, pending conditions including antitrust approval. The final price is subject to adjustments for the value of net working capital and net debt when the transaction is completed.
“This transaction is consistent with our strategy of refining our product portfolio to focus on certain key areas of the vehicle,” Magna Chief Executive Officer Don Walker said.
The acquisition will help Antolin, which is based in the northern Spanish town of Burgos, double its current size, reaching sales of more than 4 billion euros ($4.3 billion), and more than 27,000 employees, the company said in a separate statement. Antolin has funds to finance the purchase, it said.
“We are leading the consolidation in the automotive industry in order to increase our competitiveness and to provide our customers with the best solutions,” Antolin Executive Chairman Ernesto Antolin said.
The car-parts industry is under pressure to consolidate as automakers look to work with partners that can produce more complex bundles of components to save costs. That requires suppliers with a range of offerings and broad geographical presence as automakers expand with new factories in markets like China, Mexico and Brazil.
Separately, Antolin said today 2014 earnings before interest, taxes, depreciation and amortization climbed 19 percent from a year earlier to 267 million euros as sales gained 6.8 percent to 2.23 billion euros.
Deutsche Bank AG and Societe Generale SA worked as financial advisers to Grupo Antolin.