(Yicai Global) Sept. 29 -- Huayu Automotive Systems Co. [SHA:600714] has proposed to acquire the remaining 50-percent stake in Shanghai Koito Automotive Lamp Co. for CNY1.72 billion (USD260 million) in cash to take the firm on as a wholly-owned subsidiary, the potential buyer said on Sept. 28.
The move will help Huayu Automotive more independently control its automotive lighting business, the firm added.
Principally engaged in the research, development and manufacture of car lights, Koito is an industry leader within China in terms of technology, business scale and market share. The company earned CNY406 million (USD60.9 million) in net profit last year and CNY293 million in the first seven months of this year.
After the deal, Koito will become a wholly-owned subsidiary of Huayu Automotive and included in its consolidated financial statement. However, the as transaction isn't expected to be complete until the first half of next year, it shouldn't have a significant impact on the buyer's performance or financial position in 2017.
Huayu plans to actively drive the development of the automotive lighting business and integrate resources to make the firm more profitable. It will also accelerate the optimization of domestic and overseas distribution in a bid to develop core competence in the smart car lighting business and provide better products and services to customers.