PCM buys GM steering business for 420 mln dollars
- Source: Gasgoo
- [16:14 November 30 2010]
- Comments
China's Pacific Century Motor Systems Co., Ltd. (PCM) Monday concluded the 420 million dollar acquisition of Nexteer Automotive, the steering business unit of General Motors (GM).
At Nexteer's headquarters in Saginaw, Michigan, PCM and GM inked the agreement, in which PCM will take 100 percent of Nexteer but leave the management in place, a crucial factor that gave PCM an edge over other potential buyers.
Nexteer Automotive is a leading provider of advanced steering and related technology in the US. It has 8,300 employees at 42 facilities throughout North and South America, Europe and Asia. Its top customers include GM, Ford, Chrysler, Volkswagen and Toyota.
Affected by the financial crisis, Nexteer's revenue dropped to 1.6 billion dollars in 2009 from 2008's 2.1 billion dollars. Now the company has recovered and is expected to reap 2 billion dollars in revenue and 200 million dollars in profit this year.
According to the agreement, the deal includes Nexteer's global steering and half shaft operations in 22 manufacturing facilities, six engineering facilities and 14 customer support centers.
The deal, which is expected to add over 100 new jobs in Saginaw, has surpassed BWIGroup's 100 million dollar acquisition of US Delphi Corp. in 2009 as China's largest foreign auto parts company purchase.
"As the new owner, PCM is proud to provide access to continued capital investment that will allow Nexteer to continue its global growth in technology and manufacturing, particularly in China's market," PCM Chairman Zhao Guangyi said.
"China has done well in the whole-car manufacturing industry, but is in urgent need of world leading auto part technology and experience," Zhao told Xinhua. "I believe this deal will give a strong push to China's auto part sector."
Nexteer CEO Robert J. Remenar said: "With a well-capitalized owner committed to growing the business, we can focus all our resources on industry-leading engineering and product development. Our owner's relationships will open new channels to the dynamic and rapidly growing Chinese automotive market."
PCM was jointly founded by the state-owned Beijing E-Town International Investment & Development Co., Ltd. and automotive manufacturer Tempo International Group Ltd.
Zhou Tianbao, Chairman of Tempo International Group, said the acquisition would bring world-leading technology and management experience to China's auto parts sector.
On July 12, PCM and GM held a signing ceremony on the sale at GM's headquarters in Detroit after the two sides had worked for six months on the deal.
