NEW DELHI -- Indian auto parts maker Motherson Sumi Systems is buying Europe's Reydel Automotive Group, which manufactures vechicle interior components, for $201 million in a deal that will diversify its product range and expand its geographical footprint.
Based in Noida, near the Indian capital of New Delhi, Motherson Sumi Systems, part of the Samvardhana Motherson Group, was established as a joint venture with Japan's Sumitomo Wiring Systems in 1986.
The acquisition of Reydel is part of Motherson Group's aims to reduce dependence on any single product and market over the next few years.
"The synergistic combination of complimentary portfolios [of the two firms] will create a stronger business," Vivek Chaand Sehgal, chairman of Samvardhana Motherson Group, said on Monday. This partnership "brings us closer to meeting our 2020 targets and helps us achieve our strategy to not have any component, customer or country contributing more than 15% to our business."
Headquartered in Baarn, the Netherlands, with its main corporate office in Clamart in France, Reydel has 20 plants in 16 countries across Europe, South America and Asia. The company, owned by U.S.-based private equity firm Cerberus Capital Management, employs 5,650 people and clocked $1.05 billion in revenue in 2017.
Renault, PSA, Volkswagen, GM and Mahindra & Mahindra are among the Reydel's customers. Reydel makes instrument panels, door panels, console modules, decorative parts and cockpit modules.
Motherson Sumi Systems -- which makes wiring harnesses, passenger car mirrors, plastic components, interior modules and trims, and bumpers -- also counts top auto brands such as Daimler, Ford, Suzuki and Toyota as its customers. The Motherson Group has over 230 manufacturing facilities in 37 countries and employs more than 100,000 people.
In financial year ended March 2017, Motherson Sumi Systems reported a turnover of $6.5 billion, while Motherson Group made $9.1 billion. By 2020, the group aims to generate revenue of $26 billion, with a target of $18 billion for Motherson Sumi Systems.
Since 2002, Motherson Sumi Systems has acquired 20 companies, including Visiocorp, a British rear-view mirror maker it bought in 2009, and Peguform, a German plastics company it took over in 2011.
The proposed acquisition of Reydel will be funded by existing cash and bank borrowings, according to a company statement. The transaction will be discussed with employee representatives and could close within six months subject to regulatory and other approvals, it added.