STOCKHOLM, Sweden — Haldex AB has reached an agreement with Suzuki Metal Industry Co. Ltd., a Japanese manufacturer of steel wire, to divest its Garphyttan Wire division. The purchase price, which will be paid in cash, is estimated to be approximately $103 million, on a cash and debt free basis. The transaction is expected to be completed between April to June 2009, when the final purchase price will be confirmed.
As announced earlier this year after the acquisition of Concentric, Haldex has actively evaluated options in order to optimize its group structure. Hence, Haldex’s strategic rationale for divesting Garphyttan Wire is to focus on segments where the group can achieve intra-group synergies and sustainable market positions based on innovative and leading products, providing a foundation for long-term growth and good profitability.
Garphyttan Wire is a division with a strong position in the manufacturing of advanced spring wire for use in combustion engines and transmission systems for passenger cars and commercial vehicles. The division’s most important product is valve spring quality wire, which is mainly used in valve springs for combustion engines. The company has production facilities located in Garphyttan, Sweden, South Bend, Ind., U.S., and Suzhou, China.
“We are very happy with this agreement. With the divestment of Garphyttan Wire, we have taken a further step to optimize the group structure and create a more focused Haldex Group. We are convinced that Suzuki Metal will be a good owner with knowledge to further develop the business strategically. Suzuki Metal’s acquisition of Garphyttan Wire entails industrial synergies which cannot be achieved within the Haldex Group,” said Joakim Olsson, CEO of Haldex.