Shares in Metair Investments leapt yesterday after the automotive component manufacturer said it had acquired control of Istanbul Stock Exchange-listed Mutlu Akü, the leading lead acid battery manufacturer and distributor in Turkey and the Middle East, in a transaction valued at R2.17 billion.
The transaction includes the acquisition of controlling interests in Plastik, Turker Izabe and Metropol that provide support to Mutlu Akü’s battery manufacturing business. It will increase Metair’s exposure to high growth markets and help it capture more of the start-stop battery market.
The deal follows Metair Investments in March last year concluding its first cross-border acquisition in buying 99 percent of the shareholding in private Romanian company Rombat, the largest automotive lead acid battery manufacturer in that country, for e42.8 million (about R578m).
Metair has in terms of a share purchase agreement acquired 100 percent of the issued share capital of Mutlu Holding, giving it an effective 75 percent interest in Mutlu Akü.
Metair is required under Turkish law to make a mandatory tender offer to the minority Mutlu Akü shareholders for the remaining 25 percent of the issued shares not held by Mutlu.
Theo Loock, Metair’s managing director, said that if all the remaining shareholders in Mutlu Holdings accepted the offer, it would increase the value of the transaction to between R2.6bn and R2.8bn.
Loock said the acquisition gave Metair early realisation of its strategy to derive 50 percent of its business from original equipment manufacturers (OEMs) and 50 percent from the aftermarket, with batteries making up half of its overall business by 2016.
He said the acquisition would enable Metair to capture a greater share of the anticipated growth in the market for start-stop batteries, with a total increased production capacity of 11.7 million batteries a year when combined with First National Battery in South Africa and Rombat.
Loock said Mutlu Akü did not have any exposure to the OEM start-stop battery market, which meant Metair’s technology could be overlaid in the business as Metair did in Romania.
“Combined between the two businesses, this will give us between 1.8 million to 2 million annual start-stop battery manufacturing capacity post acquisition.”
The transaction is still subject to various conditions, including regulatory and shareholder approvals.
Metair’s shares surged 7.36 percent to close at R35.75 yesterday.