General Motors Co., the largest U.S. automaker, agreed to sell its Nexteer Automotive steering-parts unit to Pacific Century Motors, an entity formed by Tempo Group and an affiliate of the Beijing government.
Sale terms weren't disclosed. The price may be about $450 million, said a person familiar with the matter, who asked not to be identified because the talks were private. The deal is expected to close this year, GM said in a statement.
GM acquired Nexteer from Delphi Corp. last year and deemed it a non-core asset. Selling the Saginaw, Michigan-based supplier lets GM focus on engineering major systems, like engines and transmissions, while outsourcing smaller components to suppliers, said Mike Wall, an analyst with IHS Automotive, a research firm based in Lexington, Massachusetts.
"GM doesn't need to be the expert in steering," Wall said. "They can buy that from someone else. For some of these Asian parts companies, it makes sense to get into other parts businesses."
Nexteer had $2.1 billion in revenue in 2008, almost half of it from GM. The unit has 6,200 employees, 22 manufacturing sites and 60 global customers. GM said in January it would sell the steering unit. The sale includes the 22 factories, six engineering sites and 14 customer support centers in North America, South America, Europe and Asia.
The automaker bought the business from Troy, Michigan-based Delphi as GM's former parts unit emerged from bankruptcy in October. Detroit-based GM exited its own bankruptcy in July 2009, with the U.S. government holding a 61 percent stake.
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