Brazil’s Iochpe-Maxion LLC is buying Hayes Lemmerz International in an all-cash deal worth a reported $725 million, according to an agreement between the two automotive suppliers. Hayes Lemmerz is the world’s largest producer of aluminum and steel wheels for automotive and commercial vehicle builders, and its buyer produces steel wheels for commercial and off-road vehicles, plus chassis, siderails, and cross-beams for trucks, buses and light commercial vehicles.
A merger will combine the two wheels businesses into an even more consequential global supplier. In a statement, Iochpe-Maxion said the two firms are developing integration plans built on “cultural similarities” and best practices from each company. It predicted operating cost savings that would benefit customers and support organizational growth.
Iochpe-Maxion operates five plants in Brazil, one of which manufactures steel wheels, chassis parts and other structural products for trucks and commercial vehicles. Four more plants are part of a joint venture with Amsted Industries that manufactures railway freight cars, railway wheels, and railway castings. Hayes Lemmerz has 17 plants, two of which are in Akron, Oh., and Sedalia, Mo.
Iochpe-Maxion said the combined company will manufacture in 13 countries and a would be active in “every major automotive region.”
"Automotive and commercial vehicle manufacturers are expanding globally and they are seeking global suppliers with the resources to invest and grow with them," stated CEO Dan Iochpe. "Vehicle manufacturers have many choices when it comes to the wheels they offer their customers, including both aluminum and steel wheels. The acquisition of Hayes Lemmerz will enable Iochpe-Maxion to better meet the needs of vehicle manufacturers by lowering costs across all products, enhancing service levels and offering a broader product line."
Hayes Lemmerz emerged from a structured bankruptcy in 2010, reducing its overall debt and pension and benefits obligations. It once produced a series of powertrain components but it sold a number of operations in recent years as it concentrated on manufacturing steel and aluminum wheels.
"We look forward to a promising future with a long-term strategic shareholder like Iochpe-Maxion,” Hayes Lemmerz chief operating officer Fred Bentley said. “This transaction is in the best interests of our customers, who will receive world-class products and services from a company with an even greater global footprint. The transaction is also in the best interests of our suppliers."
"Iochpe-Maxion has a strategic, long-term interest in the global automotive and commercial vehicle industries," according to CEO Dan Iochpe. "One of our principal strategies is to sustainably grow our core business internationally. This transaction will position us well to partner with customers to offer technologically-advanced products and outstanding services to meet their needs in every major geographic region for years to come."