TRW Inc. of Cleveland plans to expand its automotive airbag and steering wheel business in an alliance with Magna International Inc. of Markham, Ontario.
TRW agreed to buy an 80 percent interest in two Magna operations in Europe. It also agreed to develop air bags, steering wheels, seat belts and other restraint systems in conjunction with Magna's focus on vehicle interiors.
TRW will get majority stakes in MST Automotive GmbH Automobil-Sicherheitstechnik, of Ascheffenberg, Germany, and Temic Bayern-Chemie Airbag GmbH of Aschau, Germany. MST makes airbag systems and steering wheels in Germany, the Czech Republic and Spain. Temic supplies air bag inflators, propellants and related components.
The firms announced the deal Dec. 16. TRW will pay US$418 million for the German operations, which officials estimate will have sales of US$688 million this year. Magna first must buy the 25 percent of MST and the 75 percent of Temic it does not already own. It will retain a 20 percent stake in the operations.
TRW tried to boost its steering wheel business earlier this year by going after United Technologies Automotive Systems Inc.'s steering wheel operations, but Breed Technologies Inc. of Lakeland, Fla., outbid TRW. Shortly afterward Morton International Inc. of Ogden, Utah, and Autoliv AB of Stockholm, Sweden, agreed to merge their airbag businesses.
In a conference call, Magna officials said airbags are not a core business and the firm would have had to make hefty investments to be a big player in the products.