M&A

17 November, 2009

Carmakers push for parts supplier Plastal sale

* Carmakers asked investors to step in - industry source

* Intensive talks with investors - insolvency administrator

* Faurecia declines comment on specific opportunities

By Arno Schuetze and Helen Massy-Beresford

HANOVER/PARIS, Nov 17 (Reuters) - Worried carmakers asked French car parts maker Faurecia (EPED.PA) and other potential investors to look at buying the German assets of troubled bumper maker Plastal, an industry source told Reuters on Tuesday.

Intensive negotiations over the sale of Plastal's German assets are continuing as a wave of consolidation gathers pace among car parts suppliers, many of whom were hit harder than their carmaking counterparts by the industry crisis.

"We are negotiating like world champions," Siegfried Beck, administrator of Plastal Germany, told Reuters on Tuesday, adding that the sale had not yet been decided.

In a separate statement Beck said talks with several investors were still going on. More talks with carmakers, labour representatives and potential investors were due to take place this week.

An industry source told Reuters on Tuesday that Plastal's customers had asked Faurecia and other potential bidders to look at taking on Plastal's assets as they were worried about the availability of key components.

The group supplies customers including German carmakers BMW (BMWG.DE), Volkswagen (VOWG.DE) and Daimler (DAIGn.DE) as well as Ford (F.N) and General Motors [GM.UL].

The health of suppliers has become a key concern for carmakers.

Earlier this month, Jean-Christophe Quemard, head of purchasing at Europe's second-largest carmaker PSA Peugeot Citroen (PEUP.PA), which owns a stake in Faurecia, said its supplier network in France was burdened with too much capacity and needed to consolidate. [ID:nL6714845] [ID:nL0460251]

Beck had previously said he expected a deal by mid- to late-October, when he confirmed to Reuters that Faurecia was among interested parties. German newspaper Suddeutsche Zeitung reported on Tuesday that Faurecia wants to take over five of the bankrupt supplier's six German plants plus foreign operations that are not insolvent, citing people close to the matter.

"It's entirely possible," said a Paris-based analyst. "It would make strategic sense and allow Faurecia to take advantage of the current weakness of some players to strengthen itself."

The fact that Faurecia's recent deal to buy U.S.-based EMCON Technologies [ID:nL252083] was to be funded by a share issue meant that the group would be in a good financial position to carry out the purchase of Plastal assets, the analyst added.

A Faurecia spokesman said "Faurecia's management has no specific comment to make on Plastal."

He added: "Faurecia is studying calmly but actively all opportunities that come up, now and in the future, and does not want to make any specific comment about these opportunities."

Plastal has belonged to private equity group Nordic Capital since 2005 and filed for bankruptcy in March. In July, Swedish bank Handelsbanken bought Swedish, Norwegian and Belgian activities accounting for around 10 percent of the Plastal group. (Reporting by Arno Schuetze and Helen Massy-Beresford; editing by Simon Jessop and David Cowell)

Source: http://www.reuters.com