Lingyun in deal for Germany's Kiekert

Car-lock maker sought to fuel auto supplier's plans for global expansion

The automotive supplier Lingyun Industrial Group Corp and two other Chinese companies signed an agreement on March 13 to acquire 100 percent of the German car-lock maker Kiekert AG, a step meant to strengthen Lingyun's technology and position it for global growth.

The Hebei-based Lingyun said in a statement it would take over 55 percent of Kiekert from a foreign consortium that includes BlueBay Asset Management, Silver Point Capital and Morgan Stanley.

The related company Henan North Xingguang Machinery and Electric Co Ltd, which is under the China North Industrial Group Corp, will have a 25 percent stake. An investment foundation from Tianjin will have the rest.

Lingyun said that the takeover will help it obtain world-class vehicle parts technologies and make it possible for the company to compete in the global market.

The financial details of the deal weren't disclosed.

The 150-year-old Kiekert said in a statement that the world's leading producer of latch systems for passenger cars "is very well prepared for the sale to the strategic investor from the automotive sector".

In 2011, Kiekert sold more than 41 million latch systems, a record for the company. Expansion in Asia helped it achieve sales of more than 500 million euros ($653 million).

Through the acquisition, a supplier company with turnover of more than 1 billion euros and massive global growth potential is emerging, said Kiekert.

"Overseas acquisitions offer an opportunity and shortcut for Chinese automotive players to obtain core vehicle technologies," said Jia Xinguang, an independent auto analyst based in Beijing.

"China perennially lacks key technologies and the ability to develop new technologies in the vehicle parts sector. Domestic parts makers are just surviving at the bottom of the supply chain."

Alex Fan, president of the Los Angeles-based merger and acquisition specialist Crestridge Consulting, said it would be smart for Chinese automakers to target foreign parts suppliers, not vehicle makers, when they invest.

Chinese vehicle parts makers have sought to expand by making overseas acquisitions.

In December 2010, Pacific Century Motors, a joint venture between Tempo Group and the Beijing municipal government, completed the acquisition of General Motors Co's steering-parts manufacturing unit, Nexteer Automotive, at an estimated price of $420 million to $450 million.

After it purchased suspension and brakes businesses from the US parts maker Delphi Automotive LLP in 2009, BeijingWest Industries Co Ltd, which is partly owned by the Beijing municipal government, acquired the brakes manufacturing unit of German automotive supplier Robert Bosch GmbH last year.

Employing 4,000 people in its production, research and development bases in Germany, the Czech Republic, the United States, Mexico and China, Kiekert is the market and technology leader for automotive side door latches. It also invented modern central locking systems. It has registered more than 850 patents.

Lingyun develops, produces and sells plastic and metal components for vehicles, such as body trim, specialized tubes, door elements and drive shafts.

With about 10,000 staff members, the State-owned company achieved sales of more than 700 million euros last year.

lifangfang@chinadaily.com.cn