Ontario-based Linamar Corporation will not proceed with a plan to acquire three aluminum high-pressure diecasting operations in France and Spain. The plants are currently held by Groupe Arche, a French holding company, and the proposal was announced in early July. As September closed, the Canadian company stated that, “as a result of further due diligence and discussion with various interested parties, Linamar is now not in a position to file final, binding, unconditional offers and has decided not to pursue these acquisitions.”
Linamar had offered approximately $8.8 million for the three plants, seeking to increase its regional capacity for supplying the European automotive market.
The basis of the decision not to proceed is unclear. Linamar stipulated in July that its offer was “mutually contingent,” meaning that it seeks to acquire all of the plants or none of them. It also indicated that other customary conditions apply to the deal, including anti-trust approval.
The three plants are F.V.M. Technologies, at Villers-la-Montagne, France; Société Aveyronnaise de Metallurgie (SAM), at Viviez, France; and Alfisa Technologies, in Barcelona, Spain. All are subsidiaries of Groupe Arche, and all are involved in bankruptcy proceedings.
Linamar earlier emphasized that all three plants are involved in design, casting, and machining of high-pressure diecast (HPDC) aluminum automotive components, primarily in the range of 1,400 to 2,000 metric tons. It had projected revenue of $114 million (€100 million) from the operations, with available casting capacity and floor space for expansion.
The prospective buyer predicted the three plants have projected revenue $114 million (€100 million), with available casting capacity and floor space.
It further noted that the purchase would “strengthen and grow Linamar’s relationship with customers in Europe, with facility locations strategically located near key existing and potential customers and an excellent skilled workforce.” Linamar expects to finance the acquisition through existing credit facilities and in the near term invest in the plants to leverage Arche capabilities to grow the business.
Linamar has four operating divisions, Machining & Assembly, Light Metal Casting, Forging, and Skyjack. In 2016 it acquired Montupet, an aluminum automotive foundry group based in France, for $875 million. Its joint-venture aluminum diecasting and machining complex, GF Linamar LLC in Henderson County, NC, is scheduled to start up this month.