BeijingWest Industries?Co. is ready for the acquisition of Delphi's global production of braking systems and suspension parts. This deal is currently being reviewed by US Bankruptcy Court of the Southern District of New York.
A well-informed source close to BeijingWest told China Business News that the two parties had signed the exclusive acquisition agreement in Detroit, on the afternoon of March 30, US local time. "The two sides have reached an agreement. But since Delphi is under bankruptcy protection, they have to wait for the court's review." The deal will start once the court gives the approval, and the transaction is expected to be finished in the fourth quarter of this year.
"To avoid higher offers that affect the court's review, the amount of money involved in the transaction is still classified," revealed the source. "If the review goes well, it will be the largest overseas purchase in the Chinese auto part industry, as the deal involves 8 manufacturing sites, in Poland, USA, Mexico, China and France."
"These are the main fields in Delphi's traditional business scope. The acquisition puts BeijingWest in reach of a vast range of Delphi's IPR and global cutting-edge technology," the person told the reporter. "BeijingWest will also take over Delphi's major customers and global networking systems."
"As this transaction involves many overseas businesses, BeijingWest plans to hire a management team for global coordination. And the company also plans to retain Delphi's original management teams in the purchased industries," the source also revealed.
This acquisition will help BeijingWest become a leading global auto part manufacturer, thereby exerting great influence on Beijing's auto part industry, and its structural upgrading.
BeijingWest Industries Co. is a JV specially established for this acquisition. Its registered capital is 800 million yuan (US$117.13 million).
Delphi broke away from General Motors in 1999. It is a world leader in auto electronics, auto parts and system integration. Delphi used to be the world's largest auto parts supplier, supplying GM, Ford, Toyota and other major auto manufacturers. It has a presence in 34 countries with 152 sole proprietary plants. Due to financial difficulties, Delphi applied for bankruptcy protection in October 2005; since then it has been under the supervision of the US bankruptcy court. According to its annual report, Delphi's entire assets total US$10.31 billion, and its debt, US24.59 billion.
For more information, please consult the article in Chinese:
http://www.china-cbn.com/s/n/000004/20090402/000000111253.shtml
(China.org.cn by Maverick Chen, April 2, 2009)
