Magna International said it plans to sell its global fluid pressure and controls unit to South Korea's Hanon Systems for about $1.23 billion.
Hanon said the deal marks one of the biggest acquisitions of an overseas supplier by a South Korean company, and aims to boost its product lineup for electric vehicles.
Magna said its global fluid pressures and controls business produces mechanical and electronic pumps, electronic cooling fans and other components. The unit generated $1.4 billion in revenue in 2017. Magna said about 4,200 employees at 10 operations in North America, Europe and Asia will transition to Hanon Systems.
"With this transaction, Magna's powertrain business will continue to focus on bringing power to the wheels as a full-system supplier of transmission and other driveline-related systems, including electrified versions," Magna said in a statement.
The transaction is expected to close during the first quarter of 2019, the statement said.