CN:China Fuyao set to bid for Ford glass assets
China Fuyao set to bid for Ford glass assets
SHANGHAI -- Fuyao Group Glass Industries Co. Ltd., China's biggest auto glass maker, is set to bid for North American glass-making assets of Ford Motor Co., industry sources said.
The bid would mark another effort by the Chinese auto industry to expand overseas by buying distressed assets from a foreign firm. After taking over Britain's collapsed MG Rover last year, Nanjing Automobile Group announced plans last month to build the first Chinese car assembly plant in the United States.
Automotive Components Holdings LLC, a parts subsidiary of Ford, is discussing the sale of glass manufacturing operations and other assets with potential buyers as part of the troubled U.S. auto giant's restructuring.
"Fuyao has held two rounds of talks with Ford and has been selected to submit a final bid for the glass assets," a source told Reuters. A second source confirmed this on Tuesday, saying Fuyao had hired a Wall Street investment bank as an adviser.
A team of Fuyao executives, headed by Chairman Cao Dewang, has just ended a trip to the United States where they met Ford officials and investment bankers. They are now finalizing the bidding document, the sources said.
Fuyao shares, valued at just short of $1 billion, dropped 2.2 percent in Shanghai on Tuesday.
Automotive Components Holding has three glass manufacturing plants in Tulsa, Okla.; Nashville, Tenn.; and Mexico.
The sources declined to say which of those assets Fuyao was interested in or how much it might pay, but a sale could run into millions of dollars. Earlier this year, one plant alone, the Nashville facility, employed about 750 people, according to a local press report.
"We have lots of serious discussions going on," Automotive Components Holding spokeswoman Della DiPietro told Reuters, declining to identify possible bidders.
Executives at Fuyao, which is based in China's southern province of Fujian and is a supplier to Ford, declined to comment.
FOOTHOLD IN NORTH AMERICA
The Fuyao bid, if accepted, would give the Chinese company a manufacturing foothold in North America, where it already generates 16 percent of its total sales.
"As a Ford supplier, Fuyao has a chance to get what it wants," an investment banking source told Reuters. "But pricing will be a key factor, as there may be other interested bidders in the U.S. or Europe."
Wanxiang Group, China's largest auto parts supplier, expressed interest late last year in assets of bankrupt U.S. parts maker Delphi Corp., but no deal has been reached so far.
After relying for years on domestic joint ventures with foreign auto firms, several Chinese automakers, including top carmaker SAIC Motor and smaller rivals such as Geely Automobile Holdings Ltd. and Chery Automotive Co., have announced ambitious plans for volume sales abroad in coming years.
"We are used to seeing foreigners flocking in. Now we should prepare to see the Chinese going out," said Chen Qiaoning, analyst at Tianxiang Securities in Beijing.
The investment bank source said Fuyao had no plans to raise funds at present, but in addition to the possible North American deal, was keen to acquire smaller local rivals in the near term.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....