Lear Corp. stepped up its pursuit of a European customer base with the acquisition of Germany's Keiper Car Seating GmbH & Co.
Lear paid Putsch GmbH & Co. $235 million for Keiper and its partnerships. That includes a joint venture between Keiper and Lear's Canada-based competitor, Magna International.
A Lear spokeswoman declined to comment on how that relationship would be handled. Magna was also a bidder for Keiper.
'Everyone has been trying to buy Keiper,' said Nick Colas, auto analyst with Credit Suisse First Boston in New York. 'It is associated with the world's best technology. Whoever acquires Keiper acquires that image.'
Keiper was the last independent German seat maker.
Keiper is 'an outstanding business,' said Frankfurt-based Lear Vice-President Robert Rossiter, who struck the deal with Keiper owner Ulrich Putsch.
'Its portfolio and customers fit us very well,' said Rossiter. 'It brings us customers we were not doing business with. Its management also has good relations with Volkswagen, which is good for us in the long term.'
Nearly 70 percent of Keiper's seat sales are in Germany. The biggest customers are Daimler-Benz, Volkswagen-Audi and Porsche. Mercedes accounts for about 44 percent of sales.
Revenue in 1996 was DM930 million ($547 million). Keiper expects sales of DM1.1 billion in 1997.
Keiper has 10 seat assembly plants around the world - in Germany, Brazil, Italy, Hungary, South Africa, Mexico and the US.
The US plant supplies General Motors' Chevrolet Malibu.
In Europe, Keiper makes seats 'just-in-time' in Bremen, Germany, for Mercedes' C class. It also supplies seats for the E class.
Lear wants more European business.
Rossiter moved his office to Frankfurt in April to focus more on European sales and operations. He wanted to be nearer to the decision-makers on existing and potential European world-car programs.
Rossiter said Europe is 'absolutely critical to growth plans.' He said Keiper 'fills out areas where we had weaknesses.
'Your position in the world market depends on how strong you are in Europe.'
Lear's 1996 sales were $6.2 billion, up 33 percent on 1995. Its sales in North America were $4.4 billion.
Putsch has retained its Recaro GmbH seating business, though Lear wanted to buy that, too. Recaro makes sports car seats. Putsch also kept Keiper GmbH, which makes metal seat frames.
Ulrich Putsch said Keiper had become too small compared with its global competitors.
In May, Magna paid $52 million for UK-based Tricom Group Holdings Ltd. It supplies Ford and GM and has annual sales of around $100 million.
Europe's seating and interiors market will see further consolidation, said Colas at First Boston. Ford plans to sell its internal seatmaking operation. It supplies the Mondeo.