Delphi acquires GM’s stake for $3.8-bn
01 Apr 2011
In a bid to simplify its capital structure, US auto supplier Delphi has bought stakes owned by General Motors Corporation and the Pension Benefit Guaranty Corporation for about $4.4 billion.
According to GM, the transaction was valued at $3.8 billion. It also acquired PBGC's Class C interests for for $594 million.
According to Delphi with the transactions the company has an efficient capital structure and a prudent level of debt.
The transaction leaves the company in a position to go in for an initial public offering that, according to industry watchers could come in a year.
Some analysts say the move away from GM would prove helpful in the company distancing itself from US government involvement which could appeal to some investors. The US Treasury owns a third of GM.
GM spun-off Michigan-based Delphi in 1999. The company is one of the biggest suppliers to the carmaker.
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