(Yicai Global) Nov. 13 -- Shares of Hongfa Technology have risen after the Chinese car parts maker said that its unit will acquire the relay business of German competitor Hella to enhance its global prowess in electromagnetic switches.

Hongfa's [SHA:600885] share price rose by 3.6 percent to CNY27.64 (USD3.90) in the afternoon.

Hongfa Automotive Electronic has penned a framework agreement with Hella to buy the equity of Hella Xiamen Automotive Electronics, as well as the equipment and inventory of Hella Xiamen Electronic Device's relay business for CNY92.4 million (USD13.2 million), the Xiamen-based firm's parent said in a statement yesterday.

The deal will increase Hongfa's global market share and for five years, Hella will not be allowed to compete with Hongfa in the field of relays, it added. The related business brought its original owner EUR43 million (USD47.4 million) in revenue during the previous fiscal year.

Hella will sell its relay business to align even more closely with the major market trends of electric mobility and autonomous driving, the Lippstadt-headquartered company said in a statement yesterday.

Editor: Emmi Laine