Magna International is buying OLSA, an Italian maker of automotive lighting products, for 230 million euros ($267 million).
Magna says the deal will make the company a global lighting supplier and expand its capability to design, engineer and manufacture headlamps, tail lamps and other lighting products.
"Lighting represents a growth area for Magna due to increasing levels of electronics integration and a desire for automakers to differentiate their vehicles through styling," President of Magna Lighting John O'Hara said in a release.
OLSA is based in Turin, Italy, and employs about 2,500 people. It has manufacturing facilties in Italy, Poland, Brazil, China and Mexico. Its customers include the Volkswagen Group, BMW, Daimler and Fiat Chrysler Automobiles.
Magna will have 11 lighting manufacturing facilities after the Olsa deal, which is expected to close by the end of 2018.
Earlier this month, Magna said it would set up two joint ventures with Beijing Electric Vehicle to build electric cars in China.
Reuters contributed to this report