* Dongfeng seeks stake of around 30 pct in German supplier
* Getrag eyes new partner after Dana's 2007 exit-sources
* 30 pct stake in Getrag worth below 500 mln euros-source
* Earlier talks with Magna fell apart over price-source
(Adds details about China's auto industry deals)
By Philipp Halstrick and Soyoung Kim
FRANKFURT/NEW YORK, March 25 China's No. 2
automaker, Dongfeng Motor Group (0489.HK), is in advanced talks
to buy a stake of around 30 percent in German auto supplier
Getrag in a bid to gain access to transmission technology,
people familiar with the matter said.
The discussions come as privately held Getrag, one of the
world's largest automotive transmission manufacturers and a
major supplier to Ford Motor Co (F.N), seeks a strategic
partner to provide fresh capital for the company, these people
The stake of around 30 percent in Getrag would be worth
less than 500 million euros, or $700 million, one of these
U.S. auto supplier Dana Holding Corp (DAN.N) acquired a 30
percent stake in Getrag in 2000 from Germany's Hagenmeyer
family but sold it back to the family in 2007 after Dana fell
into Chapter 11 bankruptcy.
The Hagenmeyer family, which owns the entire company, tried
to sell the 30 percent stake to other strategic partners after
Dana's exit, including Canadian auto supplier Magna
International (MG.TO), these people said. The talks with Magna
a few years ago fell apart due to differences over prices, they
If the latest discussions with Dongfeng lead to a
transaction, it would mark the first time that a Chinese
company has bought into the German auto sector.
Like any other deal negotiations, the discussions between
Dongfeng and Getrag could still fall apart, these people
The people asked not to be identified because the
discussions are confidential. A Dongfeng spokesperson in China
said he had no knowledge of the matter and declined to comment.
Getrag representatives in Germany declined to comment.
Chinese automakers and parts suppliers are looking for
advanced automotive assets overseas to transform themselves
from low-cost manufacturers into leading technology providers.
Transmission technology such as Getrag's is among the most
sought-after assets by Chinese auto companies, people familiar
with the matter say.
Chinese companies have also emerged as serious buyers in
the global auto industry as they can often afford to pay more
since they have a big and fast-growing customer base in China,
the world's largest auto market.
Pacific Century Motors, a joint venture of Chinese auto
parts supplier Tempo Group and the financing and investing arm
of the Beijing municipal government, bought General Motors Co's
(GM.N) Nexteer steering business last year for about $450
Getrag had revenue of about 2.6 billion euros in 2010 and
posted a small profit after losses in the previous two years
amid the global industry turmoil -- which hampered its earlier
efforts to find a strategic partner. Getrag expects to improve
profitability substantially this year.
(Reporting by Philipp Halstrick in Frankfurt and Soyoung Kim
in New York; additional reporting by Hendrik Sackmann in
Stuttgart; Editing by Steve Orlofsky)
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