FRANKFURT, June 30 (Reuters) - The family that owns German car-parts maker Getrag is in advanced talks to sell a stake in the company to a North American parts maker, two sources familiar with the matter said on Tuesday.
Getrag, one of the world's largest suppliers of automatic transmission systems, was approached recently by a North American company with an offer of about 1 billion euros ($1.11 billion) for the stake, the sources said. The sources declined to be named as the talks are private.
One of the sources said a deal is likely to be announced within two weeks and that Canadian auto-parts maker Magna International Inc is seen as a front-runner in the race.
The sources did not say what other players may be involved.
They also did not provide details on the size of the stake under consideration or the valuation of the company, adding that the transaction has not yet been finalized and could still fall apart.
Getrag could not be reached for comment. Magna said it does not comment on speculation.
Getrag's technology is in high demand as advanced gear-shifting is seen as offering auto manufacturers opportunities to cut the carbon emissions of their vehicles.
The company's position, however, has become more vulnerable since Germany's ZF Friedrichshafen acquired U.S. rival TRW Automotive Holdings in a deal that closed last month, creating the world's second-largest automotive supplier by sales.
Getrag started discussing a public listing with investment banks last year. But the recent approach by the North American company has triggered a new strategic review, with management exploring options to maximize value, sources familiar with the matter have said in the past.
Car parts makers such as Continental AG, Valeo SA , Faurecia SA and Leoni AG trade at six or seven times their expected core earnings.
Getrag, which was founded in 1935 by Hermann Hagenmeyer and employs more than 13,000 workers, has had a slower recovery from the global economic crisis than other car parts makers. In November it estimated it would have 2014 revenues of 3.3 billion euros and 230 million in profit before interest and taxes (EBIT).
In November, Getrag Chief Executive Officer Mihir Kotecha said he expected the company to generate 5 billion euros in revenues in 2019, adding that China is likely to become Getrag's biggest market.
$1=0.8974 euros Additional reporting by Allison Martell in Toronto; Editing by Peter Galloway