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Shanghai Automotive Co, a major car component maker in China, said on Friday it will pay 67.91 million yuan for a 50% stake in Shanghai TRW Automotive Safety Systems Co, according to Dow Jones.

Shanghai Automotive is buying the stake from a related company and both are units of Shanghai Automotive Industry Corp. (Group), the report added.

“The stake transfer agreement was signed recently and we have already paid half of the transaction amount,” Shanghai Automotive said in an announcement cited by Dow Jones.

“This transaction will help the company to explore new business growth points, optimise resource allocation and improve competitiveness…it won’t bring about major losses and it won’t hurt small or medium-sized investors’ interest,” the company reportedly said.

According to Dow Jones Shanghai TRW Automotive manufactures seat belts and air bags for cars. The remaining 50% stake of Shanghai TRW is still held by TRW Inc. in the US.

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By GlobalData