FINLAND: Valmet Automotive to acquire Karmann's roof business

By Simon Warburton | 5 November 2010

Valmet Automotive is estimating it should receive regulatory approval for its acquisition of convertible roof specialist Karmann by year-end.

The Finish company is due to buy Karmann's convertible roof operations in Germany and Poland and although the purchase price is unknown, all 700 employees will stay in their respective countries.

"All 700 will stay in Germany and Poland [while] I think approval will be by the end of this year," a Valmet spokeswoman in Finland told just-auto.

"This is an ideal combination with Karmann - one third of our production of 1.1m vehicles has been open cars so we are deeply involved in convertibles."

The Valmet spokeswoman conceded sales had dropped between 2007-2009 during the financial crisis, but were now rebounding and that Karmann's position in the top three in its field meant there were "a lot of good things to be combined."

She added: "We have been manufacturing convertibles for decades - we know this roof business" - and highlighted Valmet's expertise manufacturing completed cars for Porsche (Boxster) and Saab's 9-3.

Valmet has also developed over 10 convertible soft and retractable roof systems for concept cars.

Valmet Automotive has inked the deal with the administrative receivers of Karmann's roof business but both declined to reveal the purchase price.

Completion of the acquisition would make the roof operation Valmet Automotive's fourth line in addition to engineering, manufacturing and business services.

"This acquisition is so far the most significant step in our strategy to expand internationally and to become a leading supplier of a wide range of services for the automotive industry," said Valmet president Ilpo Korhonen.

"[Karmann's] customers include BMW/Mini, Daimler, Renault and Bentley. Karmann's roof know-how complements Valmet Automotive's convertible know-how and substantially increases our capacity in engineering and in component manufacturing."

The Finnish company estimates the manufacturing of convertibles in Europe will reach pre-recession levels of around 0.5m cars by 2012-2013.

Net sales of the business to be acquired are forecast to be around EUR180m (US$254m) in 2010. As one of three leading suppliers of roof systems, Karmann has a market share of around 25% and an order backlog spanning several years.

Uusikaupunki, Finland-headquartered Valmet Automotive - employing around 800 people - had net sales of EUR56m in 2009. The company has operations in Frankfurt, Germany, and Gothenburg, Sweden, while a new unit in the US is slated to open this year.

Porsche Cayman sports cars, electric Garia golf models and Think City urban vehicles are currently manufactured in Uusikaupunki, while serial production of Fisker Karma hybrids is due to start in the first quarter of 2011.