Delphi Corp has agreed to sell its remaining global suspension and brakes businesses to China's BeijingWest Industries Co Ltd, as part of its restructuring plan, Delphi said.
It has made "further progress with its portfolio transformation and has entered into an asset sale and purchase agreement with BeijingWest Industries," said the ailing US auto parts supplier in an email reply to China Daily yesterday.
BeijingWest Industries is 51 percent owned by State-owned Shougang Group. Bao'an Investment and Development Co Ltd holds 24 percent in the company while the Beijing municipal government holds the rest.
The final sale of the business is subject to court approval and other closing conditions. Delphi anticipates the sale to close during the fourth quarter of this year.
However, both Delphi and Shougang Group refused to disclose further details.
US local newspaper Detroit Free Press reported that the Chinese company would pay $100 million in cash for the Delphi businesses, providing Delphi much-needed capital to focus on its core business.
"This is the right deal at the right time for this particular business," Rodney O'Neal, Delphi's CEO and president, was quoted as saying.
Under the sale and purchase agreement, BeijingWest Industries will acquire machinery and equipment, intellectual property as well as take over certain customer and supplier contracts.
"Delphi will carefully manage the transition of the business, and the sale will be completed in coordination with Delphi's customers, employees, unions and other stakeholders," the former parts subsidiary of General Motors said.
Chinese auto analysts said they believed that Chinese industry players' acquisition of international automobile parts assets and brands instead of vehicle producers was a wise decision with low risk.
(China Daily April 2, 2009)