MUNICH -- Finnish contract manufacturer Valmet Automotive, which builds the Porsche Boxster and Cayman, plans to buy insolvent German supplier Wilhelm Karmann GmbH's roof business.
Valmet has signed a contract to gain control of the unit, Karmann's insolvency administrator, Ottmar Hermann, said in a release on Friday. The release did not mention the financial terms of the deal, which must be approved by competition authorities.
If approved, Valmet will get a factory in Osnabrueck, Germany, and Karmann's operations in Zary, Poland.
In May, German antitrust regulators blocked Magna International Inc.'s planned takeover of Karmann's roof division because it feared that the combination of Magna and Karmann would have led to there being only two big suppliers in the sector.
Regulators were concerned that if they approved the acquisition, Magna/Karmann and Germany's Webasto, which recently acquired the roof unit of German supplier Edscha, would dominate the market for convertible roofs. They believed the lack of competition would lead to higher prices.
The value of Europe's convertible roof business was about 600 million euros (about $733 million) in 2009.
Valmet has been producing the Porsche Boxster since 1997 and the Cayman since 2005 at its plant in Uusikaupunki, Finland. The company also makes the City for Norwegian electric car maker Think and the Karma plug-in hybrid for Fisker Automotive of the United States.
Karmann, a company best known for creating the Volkswagen Beetle-based Karmann Ghia coupe in the 1950s, filed for insolvency on April 8, 2009, after seeing its coachbuilding business dry up as automakers moved projects in-house or canceled contracts during the worst of the recent global financial crisis.
This year, however, Karmann has been slowly brought back to life. The roof unit is going to develop the Audi A3's new convertible top, which is the first new contract for Karmann since it went into insolvency 19 months ago.
Audi parent Volkswagen AG has played a huge role in giving Karmann another chance. Europe's largest automaker established Volkswagen Osnabrueck in the early part of this year on the former site of the Karmann holding company. Volkswagen Osnabrueck announced last month it would took over Karmann's technical development and metal units and said that the Osnabrueck plant's 1,000-person work force would start making the Golf Cabrio in spring 2011.