* 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 said on Thursday it will buy France’s Montupet for 771 million euros ($915 million) in a deal that will boost its exposure to manufacturers like Volkswagen and Peugeot.
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, 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, BMW, General Motors 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 Additional reporting by Allison Martell and Euan Rocha in Toronto, Emiliano Mellino in London and Matthieu Protard in Paris; Editing by Diane Craft, Andrew Callus and Adrian Croft