The Beijing West Industries Group (BWI) of China announced Monday it has signed an asset sale and purchase agreement with Delphi Corporation for the purchase of the business units of Delphi Ride Dynamics and Brakes worth approximately $100 million.
Under the agreement, BWI, which will acquire machinery and equipment, intellectual property and certain real property, will also take over the assignment and assumption of certain customer and supplier contracts as well as 3,000 workers in the US, Poland, China and Europe.
Delphi will carefully manage the transition of the business, and the sale will be completed in coordination with Delphi's customers, employees, unions and other stakeholders.
"We believe this is a good opportunity for BWI Group to make healthy inroads into the world's premium automotive chassis systems market, as over the years, Delphi has accumulated a wealth of technical knowledge," said Fang Jianyi, chairman of BWI Group, immediately after signing the sale and purchase agreement in downtown Detroit.
Fred Bellar III, CFO of the Delphi Automotive Holding Group, said he believes the Ride Dynamics and Brakes business units will experience healthy development under new ownership with the resources and commitment to grow the businesses.
"My senior management team will remain intact and we will continue to take the necessary actions to increase efficiencies in our operations, provide superior returns to our stakeholders and further grow our business," Dan, Warrell, a Delphi veteran for over 40 years, who was chosen to lead the BWI Ride and Brakes business worldwide, told the press later Monday.
BWI is owned by a newly-founded company, which consists of Shougang Corporation with 51 percent of the equity, Beijing's Fangshan District with 25 percent and Bao'an Investment Development Co., Ltd. with 24 percent. Through the acquisition, Shougang Corporation, one of China's largest steel makers, expects to diversify its lines of business, with steel making still at the core. The second largest investor, Beijing's Fangshan District, finished the transaction through its wholly-owned entity Beijing Fangshan State-Owned Assets Management Co., Ltd. Bao'an Investment Development Co., Ltd. is a private company owned by four individuals and controlled by China's Tempo Group which has been operating in North America for over a decade. Tempo Group sells after-market auto parts and buys technology and equipment, and sees this acquisition aligning with its lines of businesses.
Delphi Ride Dynamics and Brakes, with its headquarter in Dayton, Ohio in the US, is a premier supplier of automotive chassis products in the world with almost all of its brake business supplying General Motors. Delphi has a long-standing tradition of invention, innovation and industrial development with the most prominent part of the business, the magnetic ride system, being adopted by customers including GM and Ferrari.
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