DETROIT-Becker Group Inc., one of the U.S. auto industry's largest independent suppliers of interior components, took a quantum leap into the global vehicle market Feb. 2 when it announced the acquisition of Gebr. Happich GmbH of Wuppertal, Germany. Happich, a company nearly twice the size of Becker, is a major producer of passenger compartment parts, such as instrument panels, center consoles, headliners and door trim panels.
Becker and Happich, both privately held, did not disclose financial terms of the deal. The combined organization has been renamed Becker Group International and will be based at Becker's headquarters in Warren, Mich. Its European operation, Becker-Happich GmbH, will continue to be based in Wuppertal.
The sale will be official March 31. The German government already has reviewed the deal, Happich said.
Becker's acquisition, in the works for nearly a year, not only expands the company's product line and process capabilities but also extends its geographical reach into Europe. In a single play, Becker has become, through Happich's established customer base, an important supplier to firms such as Volkswagen, Mercedes-Benz, BMW and Adam Opel.
``It's a big move for us,'' said Patrick G. Kirby, executive vice president at Becker. ``We are obviously providing a global presence for all the [original equipment manufacturers].''
Major suppliers are increasingly under pressure from automakers to supply parts on a global basis. To protect their core business in North America and Europe, parts makers are following their customers into new global markets.
Now with the Happich acquisition, Becker is well-poised to push even further into new world markets, Kirby said. Although the firm has set its sights on India and Asia, it has no specific plans yet, he said.
Becker, with 2,500 employees and 25 plants and engineering centers, is expecting sales of between $450 million and $480 million for fiscal 1995, Kirby said. Happich, with sales of $865 million, has more than 5,000 employees at 23 plants in Europe. Becker is projecting combined sales in 1996 of $1.4 billion.
Happich's owners, members of the founding Happich family, decided to sell because the company needed capital for expansion, which is necessary to keep pace with customers' logistical supply demands, said Gerd Siekmann, chairman of the management board.
Kirby said the companies originally opened discussions about a partnership but investment advisers pushed for an outright acquisition. Becker Group has no plans for a public stock offering in the near term, he added.
Becker's involvement with Happich began with an earlier acquisition, this one by the German firm.
In 1992, Becker purchased 50 percent of American Fibrit Inc. of Battle Creek, Mich., a subsidiary of Deutsche Fibrit GmbH of Germany. About 18 months ago, Kirby said, Happich acquired Deutsche Fibrit, and Becker had a new partner in Battle Creek.
Happich has been involved in at least two other joint ventures in North America. Several years ago, it joined with Voplex Corp. to produce exterior sidewall parts for Chrysler Corp. Happich ultimately left that partnership.
In 1994, the firm formed a joint venture with Donnelly Corp. of Holland, Mich., to make sun visors, a Happich specialty, and other interior parts for North American automakers. That firm, Donnelly Happich Technologies Inc., later was selected as a supplier of sun visors for the new Mercedes-Benz sport-utility vehicle to be built in Vance, Ala.
Donnelly, which held a 60 percent interest in the partnership at the outset, said last week that its involvement with Happich is under review. Kirby said Becker also is looking at the Donnelly-Happich joint venture.
Becker is considering ways to meld its considerable tooling, design and engineering departments into its new European operation. Happich makes only about 20 percent of its own tools and contracts with an engineering and design firm to do development work.
In North America, Becker's three tooling shops contributed $38 million, or 8 percent, of Becker's total sales of $479 million in 1994. The company does virtually all its own tooling and also builds tools for other automotive plastics firms. Design engineering, through Becker's Megatech Engineering Inc. unit, which employs more than 650 engineers, contributed $68 million to 1994 sales.
Becker not only supplies parts but acts as a system integrator, managing the design and construction of entire interior compartments and the participation of other suppliers. Most recently, the company says it has managed part or all of the interior systems for the 1995-96 Ford Mustang, 1996 Chrysler minivan and the newly introduced 1997 Prowler. And, for General Motors Corp., Becker also is handling the interiors for a number of future midsize, front- and rear-wheel-drive vehicles.
Becker's acquisition of Happich combines a diverse number of processes, including injection molding, low pressure and compression molding, in-mold lamination, painting, welding and assembly. The new company's materials range is equally diverse and includes engineering thermoplastics, wood fiber composites, sheet molding compound, polyurethane foaming and others.
Bruce Davis, a Crain Communications Inc. staff reporter based in Frankfurt, Germany, contributed to this story.