As part of efforts to expand into all-wheel-drive technology, BorgWarner Inc. plans to buy Haldex AB's traction unit for about $205 million in cash.
BorgWarner, the world's biggest maker of automatic-transmission parts, said that with this acquisition, it will get access to front-wheel and all-wheel drive technologies, gain a strong European customer base, and add to its current lineup of front and rear-wheel drive based products.
In a statement, BorgWarner CEO Timothy M. Manganello said that Haldex Traction Systems, “which is a strong and well-respected brand of all-wheel drive products,” will compliment its current portfolio as well as its customer and geographic mix.
It’s expected that the deal will close in the first quarter of 2011, subject to standard regulatory approvals. Haldex’s traction unit customers include Volkswagen AG, General Motors Co. and the sport-utility vehicle unit of Tata Motors Ltd.'s Jaguar Land Rover division.
The traction business’ 9-month operating profit totaled 87 million kronor on sales of 909 million kronor. Haldex released a statement, revealing that the 1.43 billion-krona ($211 million) cash transaction will result in a 1.1 billion-krona capital gain.
CEO Joakim Olsson said that proceeds from the sale will be reinvested into Haldex's two remaining divisions and will be set aside for projects that may include acquisitions or may be used to pay investors.