DETROIT -- Magna International Inc. is bidding for the U.S. operations of German convertible-top maker Wilhelm Karmann GmbH, says a source familiar with the bidding. The purchase would fit Magna's strategy to diversify and expand globally.
Magna and five other bidders, including private-equity firms, are in the running for one of the largest U.S. suppliers of convertible systems, the source says. A decision could come within a month.
Magna spokesman Scott Worden declined to comment. Karmann USA CEO Erik Roeren could not immediately be reached for comment.
Magna already has acquired Karmann Japan Co. Ltd. It is awaiting regulatory approval of its purchase of Karmann's convertible roof systems operations in Germany and Poland, which supply roof systems for the BMW 1 series, Mercedes E class and Renault Megane convertibles.
Last Thursday, Volkswagen AG signed a agreement with Karmann to buy the supplier's contract assembly factory in Osnabrueck, Germany. VW will build a convertible version of its Golf hatchback there starting next year.
Winning Karmann USA would give Magna the North American contracts for the Volkswagen Beetle, Ford Mustang and Chrysler Sebring. Magna's North American convertible business currently handles the Chevrolet Corvette and Camaro and the Dodge Viper.
Bulking up on convertible business is part of Magna's strategy to diversify into nontraditional lines. The Aurora, Ontario, supplier is a global leader in powertrains, stampings, interiors and electronics. Magna's recent move into the convertible-top business in Japan bolsters its relatively weak Asian presence.
Magna could face competition for Karmann from Webasto AG, a large German sunroof and convertible maker. Webasto executives deny any interest in Karmann USA. But when Webasto announced in August that it was entering the United States by acquiring Edscha AG's convertible business, it knew Edscha was likely to lose its last U.S. convertible contract -- the Camaro. So Webasto now looks to rebuild that business.
Parent Wilhelm Karmann is under pressure to sell the unit because the 60-year-old German company was declared insolvent last year. The action did not affect Karmann's U.S. operations, but companies facing uncertainty may lose value and key personnel.
Karmann's U.S. business has been restructured several times in the wake of the recession and a dramatic drop in convertible sales.
Besides Karmann and possibly Webasto, ASC Inc. is another of Magna's North American convertible rivals.
In Europe, Magna is a major player, supplying 14 models. Its competition there includes Pininfarina S.p.A., Valmet Automotive Inc., Webasto and Magna Steyr Fahrzeugtechnik AG & Co. KG.
Karmann's German operations consist of two plants that supply the Mini Cooper, Renault Megane, Bentley GTC and BMW 1 series.
Magna's move into convertibles in the United States and Europe took off with its 2006 acquisition of Car Top Systems, a subsidiary of Porsche AG.