Spain's Grupo Antolin has reached an agreement to purchase Magna International's interiors unit in a deal valued at about $525 million, Magna said today in a statement.
If approved by regulatory officials the deal would create the world's third-largest player in the sector, Antolin said in a separate statement. The supplier added that the acquisition would nearly double its current size, boosting annual sales of more than 4 billion euros.
In 2014, Antolin increased its revenue by 6.8 percent to 2.23 billion euros, the company reported today. Its operating profit rose 38 percent to 175 million euros and its earnings before interest, taxes, depreciation and amortization (EBITDA) grew 19 percent to 267 million euros compared with 2013.
Right now Antolin estimates that it is a top 10 interiors supplier and says it is global No. 1 for vehicle headliners. The family-owned company's long-term goal is to become the worldwide leader in automotive interiors, Grupo Antolin Chairman Ernesto Antolin told Automotive News Europe last summer.
The Magna deal, which excludes the Canadian company's seating business, includes 36 manufacturing operations and about 12,000 employees in Europe, North America and Asia. In 2014 the operations posted sales of $2.4 billion.
The transaction is considered a positive move for Magna, Richard Kwas, a senior analyst at Wells Fargo Securities said in a note to investors. "It demonstrates management's commitment to prune its portfolio," he wrote.
Reports about the negotiations for the deal began emerging last month.
The transaction is expected to close in the third quarter, Magna said.
The deal is another consolidation in the auto interiors business. Last year Johnson Controls spun off its interiors unit into a joint venture with China’s Yanfeng Automotive Trim Systems.
