* Deal boosts Canadian firm's exposure to car makers
* Gives Linamar access to aluminium castings technology
* Montupet shares suspended after exclusive Reuters report
(Adds announcement and details of transaction)
By Pamela Barbaglia and Arno Schuetze
LONDON/FRANKFURT, Oct 15 (Reuters) - Canadian auto parts
maker Linamar Corp LNR.TO said on Thursday it will buy
France's Montupet MNTP.PA for 771 million euros ($915 million)
in a deal that will boost its exposure to manufacturers like
Volkswagen (DE:VOWG) VOWG_p.DE and Peugeot PEUP.PA .
The deal, which gives Linamar access to Montupet's complex
aluminium castings technology, shows that the scandal over
Volkswagen cheating pollution emissions tests has not eroded
confidence among industry players seeking to expand in Europe.
Montupet's shares were suspended from trading on Thursday
after Reuters exclusively reported that Linamar was working on
the deal.
Linamar ranked 90th by sales among world automotive
suppliers in 2014, according to Berylls Strategy Advisors.
The industry is dominated by German firms such as
Continental CONG.DE , Robert Bosch and ZF
Friedrichshafen, which bought U.S. firm TRW Automotive
Holdings in 2014.
The deal represents a 15.5 percent premium to Montupet's
share price on October 14 and is the latest purchase by a
Canadian firm in Europe after Magna International Inc bought
Germany's car parts maker Getrag for 1.75 billion euros in July.
Montupet, which was advised by U.S. investment bank
Jefferies and Oddo, has agreed to back Linamar's offer and will
not solicit other bids.
"Montupet and Linamar complement each other very well
combining leading expertise in casting and machining," said
Montupet's chairman and CEO Stéphane Magnan.
Montupet said in September that it had not been affected by
the problems faced by Volkswagen, since it supplies Audi-brand
V6 cylinder heads to Volkswagen, which are not linked to
antipollution standards.
"Strategically, the acquisition makes a lot of sense for
Linamar, as it provides the company significant upstream
dies-casting capabilities and expertise, and makes the company a
vertically integrated supplier," said GMP analyst Justin Wu, in
a note to clients on Thursday.
Based in Clichy, on the outskirts of Paris, Montupet serves
a number of international carmakers including Renault RENA.PA ,
BMW BMWG.DE , General Motors (N:GM) and Ford
It employs more than 3,200 people and had revenue of 451.8
million euros in 2014.
In addition to France, it is present in other European
countries including Belgium and Spain, as well as the United
States, India and Mexico.
Earlier this year its management team, which owns around 37
percent of the company, expressed interest in selling their
stake to an industrial partner active in the automotive industry
and familiar with light-metal casting.
Analysts at Hamburg-based investment bank Berenberg said
then that Montupet, led by the 64-year old CEO Magnan, was
seeking a tie-up with an industry player as a way to expand into
China. Linamar has manufacturing plants in China.
Magnan has 11.69 percent of the company while executive
managing directors Marc Majus and Didier Crozet, aged 67 and 66,
respectively, own a combined 20.49 percent of the company.
Linamar, with a market capitalisation of about $3.7 billion,
has often used mergers and acquisitions to boost its
international footprint. Last year, it acquired a majority stake
in Germany's auto-parts supplier Seissenschmidt.
($1 = 0.8744 euros)