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With an eye on automotive composites, Toray buys Zoltek for $584 million

September 26, 2013

Toray Industries Inc. is making another acquisition in the growing market for lightweight carbon fiber composites.

Toray has offered to buy Zoltek Cos. Inc., a carbon fiber manufacturer based in St. Louis, for $16.75 per share in cash, or a total of $584 million, Zoltek announced Sept. 26.

Zsolt Rumy, chairman and CEO of publicly traded Zoltek, agreed to vote his 18 percent stake in the company in favor of the deal.

“Toray provides unique opportunities to drive the continued growth of our commercial carbon fibers business well into the future," Rumy said in a news release.

When the deal is finalized in late 2013 or early 2014, Zoltek will be a wholly-owned subsidiary of Toray and operate as a separate business unit.

Both Toray and Zoltek have been helping to push the automotive sector to use more carbon fiber composites, as a means of reducing vehicle weight and improving fuel economy.

Earlier this year, Toray bought a 20 percent stake in auto carbon fiber supplier Plasan Carbon Composites Inc. of Wixom, Mich.

Last year, Zoltek signed a deal with global auto parts supplier Magna International Inc. to speed the development of low-cost carbon fiber sheet molding compounds for the auto industry.

Zoltek is a smaller player in carbon fibers, with 2012 sales of $186.3 million. The company has been pursuing a strategy to manufacture carbon fibers into commercial applications at costs competitive with other materials.

Tokyo-based Toray has also been focused on expanding the use of carbon fiber-reinforced plastics beyond their traditional base in the aerospace sector. Toray has been establishing development centers globally to help speed the use of carbon fiber in the auto market.