Mitsui takes stake in global auto components supplier
Mitsui & Co and Gestamp Automocion, one of the world’s largest manufacturers of automotive components, have announced Mitsui’s intent to acquire up to a 30% stake in controlling companies of GA’s North and South American operations, and entered into definitive agreement on Jan 4.
Subject to regulatory approval by relevant authorities, Mitsui will initially acquire newly issued shares of GA’s Americas Companies through a third party allocation of newly issued shares for a 15% stake and also provide convertible loans, for a total amount of investments and loans of approximately EU300 million.
GA’s Americas Companies currently have a total of 15 plants in USA, Mexico, Brazil and Argentina. After the conversion, Mitsui will ultimately be holding up to 30% shares of GA’s Americas Companies.
The automotive market in four countries in the Americas that GA’s Americas Companies run businesses (USA, Mexico, Brazil, and Argentina) are envisaged to grow in the medium to long term, with total number of automotive production expected to increase to over 20 million in 2016 from 15 million in 2011, with a compound annual growth rate of approximately 6%.
Mitsui has been enhancing the automotive industry value chain from supply of materials to sale of vehicles. Mitsui will contribute to expand the sales and further growth of enterprise value of GA’s Americas Controlling Companies by supporting GA’s diversification efforts with Asian automotive manufacturers.
Additionally, the combination of its steel supply network including Steel Technologies Inc., logistics, financing and supply of new materials and will position this joint venture as Mitsui’s core business in the automotive value chain, mainly for its steel business.