Iochpe-Maxion to acquire Hayes Lemmerz for $725 million

Article by Christian Andrei, on October 9, 2011

Iochpe-Maxion SA will pay $725 million to acquire privately held Hayes Lemmerz International Inc. Iochpe-Maxion, a Brazilian wheel and chassis supplier, will pay $702 million and assume $23 million in debt. Iochpe-Maxion CEO Dan Ioschpe said that it has "a strategic, long-term interest in the global automotive and commercial-vehicle industries."

He added that one of its main strategies is to expand its core business internationally in a sustainable manner. With this acquisition, the company expects that it will be in the ideal position to offer “technologically advanced products and outstanding services” to comply with their requirements in each major geographic area for the coming years.

The Automotive News Data Center said that Detroit-based Hayes Lemmerz has 17 plants worldwide with a capacity to produce 63.4 million wheels annually. It reported a global revenue of $1.5 billion last year, an increase from $1.3 billion the previous year. About 53% of its 2010 sales come from Europe while 22% are from North America.

This deal is expected to be finalized in the first half of 2012. In a note to clients, Daniel Gewehr, an analyst at Banco Santander SA, described this as a “transformational acquisition” since it could more than double Iochpe's size while hastening its international expansion plan.

He added that there will be “obvious synergies” as a result. In late 2010, there were reports that Hayes Lemmerz, the world's largest wheelmaker, was negotiating with financial advisers over strategic options, including a selling the company.

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