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.
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.