India-based automotive components maker Motherson Sumi Systems is reportedly in advanced talks to acquire investor Wilbur Ross' IAC automotive interiors business.
The Economic Times newspaper said in a report that negotiations are advanced and that the purchase price for the deal would be US$750-800m. Sources told the newspaper that Ross wants to exit whet he sees as a low margin business as well as frustration with attempts at IPOs that have been derailed by market volatility.
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The acquisition would help the Motherson Group diversify its portfolio in the auto interiors space and boost its market geography to North America where IAC is a significant player.
The automotive supplier industry is currently experiencing a wave of M&A activity as companies position themselves for high-growth product areas and/or look to improve margins through increased specialisation and improved market geography.
Motherson Sumi Systems recently posted a 21% jump in third quarter net income, boosted by higher sales in global operations helped by increased production capacity.
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