By Carolyn King
Magna International Inc. said Thursday it agreed to sell its
interiors operations to Spain's Grupo Antolin for about $525
million, as the Canadian auto-parts giant narrows its vast
lineup.
The sale includes 36 plants in Europe, North America and Asia
employing about 12,000 people, Magna said in a statement, adding it
doesn't include Magna's seating business. The operations being sold
generated sales of about $2.4 billion last year.
Though relatively small, the deal is the latest in a recent wave
of deals among auto suppliers who are flush with cash after making
significant cuts during the recession. Many are accelerating
strategic moves to either grow their product portfolios or
concentrate their spending as car companies expand their
manufacturing operations in markets like China, Mexico and
Brazil.
In one of the biggest moves over the past 18 months, ZF
Friedrichshafen AG of Germany acquired U.S. rival TRW Automotive
Holdings Corp. for about $11.7 billion to create the world's
second-largest automotive supplier by sales.
Smaller transactions included car-seat maker Lear Corp.'s
purchase of leather supplier Eagle Ottawa for $850 million and
Delphi Automotive PLC's sale of its thermal business to Mahle GmbH
for $727 million.
Analysts called the deal a positive for Magna, with those at
Morgan Stanley saying the interiors unit was "barely profitable and
a constant source of operational issues," largely reflecting the
state of the interiors business overall.
The interiors business is very competitive and "has been
challenging for us," a spokeswoman for Magna said. Magna executives
have indicated plans to focus on vehicle areas in which the company
is, or can be, a global leader, she added, citing mirrors,
powertrain components and metal forming as examples.
Many transactions in the auto-supplier space have been driven by
a desire to acquire advanced technologies, get easier access to
financing or simply to remain competitive.
Last year, Magna sold the composites operations of its exteriors
unit to a Michigan-based firm and earlier this year agreed to sell
its electric-vehicle battery pack business to Samsung SDI. The
company, which had 2014 sales of $36.6 billion, has more than 300
factories as well as 84 product development, engineering and sales
centers in 28 countries.
Meanwhile, the deal doubles the size of closely held Grupo
Antolin, which makes parts for car interiors, including overheads,
seats, lighting systems and trim.
The transaction is expected to close in the third quarter,
subject to customary conditions, including antitrust approvals.
Jeff Bennett contributed to this article.
Write to Carolyn King at carolyn.m.king@wsj.com
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