Cars
Sun set to shine on Inalfa deal
Updated: 2011-06-27 14:51
By Han Tianyang (China Daily)
BAIC subsidiary Hainachuan acquires global car roof component company
BEIJING - Beijing Hainachuan Automotive Parts Co Ltd, a subsidiary of BAIC Group, said its acquisition of Inalfa Roof Systems will be completed next month after it passes antitrust scrutiny by the Chinese government.
Hainachuan reached an agreement to buy 100 percent of the Netherlands company in April after beating out four other bidders including Austria-headquartered assembly giant Magna Steyr.
Inalfa is one of the world's largest suppliers of systems and components used in sunroofs.
Hainachuan will pay about 190 million euros ($271 million) in the acquisition, said its president Guo Xinmin.
Inalfa supplies roof systems to transnational manufacturers such as BMW, Daimler, Ford, General Motors, Volkswagen, Volvo, Renault, Nissan, Hyundai and Kia. Chinese carmakers Chery and Geely are also its clients.
It is estimated that Inalfa will generate 500 million euros ($713 million) in revenue this year.
Inalfa CEO Marcel Schabos said in April that the move will enable the company to "take advantage of the considerable growth opportunities in Asia".
Hainachuan says the deal will help it to expand and climb onto the global stage.
"What we value is the profitability of Inalfa," said Dong Junxiang, CFO of Hainachuan.
Dong said the top three companies in the sector now account for 78 percent of global vehicle roof sales. Inalfa ranks second with stable supplies to clients worldwide.
Liu Yinan, managing director of Hainachuan, said mergers and acquisitions are now the trend in the auto component industry.
The company intends to take over more companies both at home and abroad, Liu said to Chinese language media.
Hainachuan has 28 companies that cover businesses in sectors ranging from vehicle interiors, exteriors and seat to electronic system and chassis. The company was co-founded by BAIC Group and Beijing Industrial Development Investment Management Co in 2008 with BAIC holding a 60 percent stake.
It plans to be publicly listed before 2013, according to its website. Insiders said the acquisition of Inalfa will facilitate Hainachuan's initial public offering.
The company's 2011 target is to generate 12 billion yuan in revenues and a profit of 1 billion yuan.
Rising with the rapid development of China's auto market, domestic car and parts manufacturers are eager to buy technologies and facilities from advanced foreign companies to improve competitiveness.
Earlier this year BAIC Group bought all the equipment and core technologies of Swedish gearbox maker Weigl Transmission for 31 million euros ($44.3 million).
Analysts say China will not have strong vehicle manufacturers without a robust components industry.
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