Canada's Linamar offers $882 million to buy French supplier Montupet

Canadian supplier Linamar Corp. has offered 771 million euros ($882 million) in cash to acquire French peer Montupet SA.

Montupet, which is working with U.S. investment bank Jefferies, said its board is supporting Linamar's tender offer. The French company supplies valued-added aluminium castings and parts to a variety of automakers in Europe, including Volkswagen.

Linamar CEO Linda Hasenfratz said in a statement: "Montupet is a technical leader in the market, well known and respected for its engineering and processing expertise in the cylinder head segment in particular where we intend to grow and leverage our respective strengths.

"Our businesses are very complementary, with our finished machining strength and Montupet’s casting expertise, and we are remarkably aligned in our business philosophies, manufacturing discipline and employee dedication with strong values and culture given our family business approach."

Linamar said it has financing commitments for 100 percent of the cash offer. The offer, for $81.78 per share, represents a 15 percent premium over Montupet's closing stock price on Wednesday, October 14. If the deal goes ahead, it would be the latest transaction carried out by a Canadian firm in Europe after Magna International Inc. bought German supplier Getrag for $1.9 billion in July.

"Montupet and Linamar complement each other very well combining leading expertise in casting and machining,” Montupet CEO Stéphane Magnan said in the statement.

Based in Clichy, on the outskirts of Paris, Montupet serves a number of international carmakers including Renault, BMW, General Motors and Ford. Earlier this year its management team, who owns around 37 percent of the company, expressed interest in selling their stake to an industrial partner active in the automotive industry and familiar with light-metal casting.

In addition to France, Montupet is present in other European countries including Belgium and Spain, as well as the United States, India and Mexico.