MEXICO CITY (Reuters) -- Mexican conglomerate Imsa said on Monday it had agreed to sell its auto battery business to partner Johnson Controls Inc. for $525 million, cash Imsa will use to pay down debt.
Imsa said Johnson Controls will also absorb an undisclosed amount of debt held by the battery business.
Monterrey-based Imsa also has steel, plastics and aluminum concerns.
Milwaukee-based Johnson Controls, the world's leading auto battery maker, had been a joint venture partner of Imsa since 1998.
"This transaction represents an opportunity to exit the battery business at the right time and to look for opportunities to create value for its shareholders and further strengthen its balance sheet," Imsa chief executive Eugenio Clariond said.
Johnson Controls, the world's fourth-largest auto parts supplier, said it expects the acquisition to provide incremental revenue of $250 million and be accretive to earnings in fiscal 2005.
It expects the deal, which it will fund initially with short-term debt, to be completed this fall.
The business employs 3,100 people and operates four manufacturing plants and one lead recycling plant in Mexico, and one manufacturing plant in Brazil.
The joint venture is a major supplier to the Mexican and South American battery replacement markets. About 20 percent of sales are to automaker customers including Ford Motor Co., DaimlerChrysler AG, Volkswagen AG and Nissan Motor Co.