Iochpe-Maxion to acquire Hayes Lemmerz for $725 million

Article by Christian A., 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.

Dan Ioschpe, Chief Executive Officer of Iochpe-Maxion, 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 around the world 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 percent of its 2010 sales come from Europe while 22 percent are from North America.

This deal to Hayes Lemmerz International 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 transaction as a “transformational acquisition” since it could more than double Iochpe's size while hastening its international expansion plan.

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

Headquartered in Sao Paulo, Brazil, Iochpe-Maxion S.A. is an automobile components manufacturer. Its products included wheels and structural components for light and commercial vehicles. Founded in 1918, the company has grown to become a major player in the automotive components industry.

In August 2009, Iochpe-Maxion acquired the wheels business of ArvinMeritor in Brazil, Mexico and the United States. Then in December 2010, Iochpe-Maxion purchased the wheels business of Nugar S.A.P.I. de C.V.

On the other hand, Hayes Lemmerz International, Inc. is a leading wheel maker in the world as based in Romulos, Michigan. A supplier to nearly every major auto maker in the world, Hayes Lemmerz makes steel and aluminum wheels, tractor trailer wheels, brake parts, as well as other automotive components.

Hayes Lemmerz's roots can traced to a number of companies. These companies are: Hayes Wheel, founded by Clarence Hayes in 1908; K.H. Wheel Company, formed by John Kelsey and John Herbert in 1909; and the company owned by the Lemmerz family, as established in 1919.

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