[THE INVESTOR] Korean auto parts maker Hanon Systems on Sept. 21 said it is acquiring Canada-based Magna International’s fluid pressure and controls business for US$1.23 billion.
Magna’s business, which includes electronic pumps and cooling fans, has 10 manufacturing and engineering facilities across Europe, North America and Asia, with over 4,200 employees. The unit posted US$1.4 billion in sales last year.
Its key products are critical parts for hybrid and electric vehicles. Hanon expects the mega deal will significantly contribute to its electric push and enhance engineering capability.
“Magna’s global fluid pressure and controls business has a strong reputation and solid customer base,” said Yoon Yeo-eul, chairman of Hanon Systems and Hahn & Co., the firm’s majority shareholder. “This business is a strategic fit to enhance our company’s capability and competitiveness with leading technology for conventional and electric vehicles.”
The deal is expected to be completed in early 2019 after regulatory clearances.
Based in Aurora, Ontario, Magna International is the third-largest automotive supplier in the world after Germany’s Bosch and Japan’s Denso. It supplies to major carmakers such as General Motors, Ford, Chrysler, BMW and Volkswagen.
On the news, Hanon Systems shares were trading at 13,250 won (US$11.86) in the morning, up 4.74 percent from the previous day.
By Ahn Sung-mi (firstname.lastname@example.org)