Tatas, Valeo in talks to acquire stake in Visteon

Mumbai: Tata AutoComp Systems (Taco) and French auto parts maker Valeo are believed to be in discussions to acquire a stake in NYSE-listed ailing automotive supplier Visteon Corporation, which was spun off from Ford Motor Company in 2005. The acquisition is expected to cost $1.5-2 billion.

For Taco, a 12-year-old company that is an original equipment supplier to major domestic and multinational car-makers, the acquisition has a strategic fit with its operations.

The company has appointed a merchant banker and is awaiting clearance from Visteon to start due diligence. Valeo is also exploring all options, including a leveraged buyout of Visteon.

Visteon makes electronic items, powertrain controls, engine induction, chassis and lighting for vehicle manufacturers. At present, it employs around 45,000 people in 26 countries, including the US, China and Germany.

Visteon posted a net loss of $153 million on sales of $2.93 billion in its first quarter ended March 31, 2007. It had a debt of $2.2 billion on March 31, 2007, which remained unchanged from the end of the previous financial year.