A Mexican maker of catalytic converters and exhaust systems has agreed to buy Delphi Corp.s global exhaust business for $17 million.
Katcon S.A., a subsidiary of Mexican holding company Bienes Turgon S.A., will use an equity increase and cash reserves to finance the deal, Katcon said in a statement yesterday. The deal is expected to be completed in the first half of this year.
Delphi has been trying to sell the business for months as it seeks to raise the money to exit Chapter 11 reorganization after more than three years under bankruptcy protection. Its global exhaust business posted sales in 2007 of about $294.4 million, Delphi spokesman Lindsey Williams said.
Delphi is shrinking to focus on its global vehicle electronics, controls and infotainment businesses.
Included in the Katcon purchase is the working capital from Delphis exhaust business, along with intellectual property, customer contracts, technical centers and certain non-U.S. factories.
Delphi ranks No. 5 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $22.28 billion in 2007.