(Yicai) June 26 -- Huaxiang Electronic, a Chinese supplier of automotive parts, is prepared to pay CNY600 million (USD82.6 million) to purchase the local business of International Automotive Components Group and become the European firm's only partner in China for interior trims for five years.

Huaxiang's unit will complete the acquisition to raise the parent's market share in the automotive trim industry, close a gap in the field of cockpit modules, and help the company optimize its cost structure and hike its earnings, the Ningbo-based firm announced today. Additionally, the pair will agree on an exclusive five-year partnership in China to jointly accept global orders. However, the target firm will need to finish auditing and asset appraisal to confirm the price.

The deal consists of six local subsidiaries of Luxembourg-based IAC, including full stakes in Automotive Components Technology, IAC Automotive Components, IAC Shanghai Management, as well as IAC Automotive Components in Changshu and Tianjin. Moreover, there's a 75-percent stake in Xiang Xing Automotive Components on the table.

IAC China has rich experience in developing and mass-producing automotive trims. It counts European and North American marques, as well as renowned domestic electric vehicle brands as some of its clients.

Investors gave the news a tepid welcome as Huaxiang [SHE: 002048] climbed 2.1 percent to CNY13.17 (USD1.80) in Shenzhen as of 2.06 p.m.

Editor: Emmi Laine