U.S. buyout firm KKR & Co said it is buying auto parts maker Calsonic Kansei from Nissan Motor and other shareholders for as much as 498.3 billion yen ($4.5 billion), seizing on a rare chance to do a multi-billion dollar deal in Japan.
KKR (KKR) announced on Tuesday it will pay 1,860 yen per Calsonic share, or a 28.3% premium over the stock’s closing price on Tuesday, for the 41% stake held by Nissan and for the rest of the shares from the market through a tender offer, taking the total size of the deal to 498.3 billion yen.
It beat out rival private equity firms Bain Capital and MBK Partners, which, according to Thomson Reuters LPC, had bid to buy Nissan’s stake. Japan’s second-biggest automaker opened the auction to sell the stake in June.
Calsonic provided private equity firms a rare opportunity to conduct a multi-billion dollar deal in a country where large companies are still reluctant to sell their units through drastic restructuring.
The deal comes as Nissan (NSANY) is looking for ways to use cash in other areas such as development of new technologies including next generation electric cars and automated driving functions. Nissan also bought a controlling stake in embattled Mitsubishi Motors Corp earlier this year.
Calsonic Kansei, which specializes in traditional auto parts, including interiors, electronics, air conditioning units and compressors, relies for about 80% of its global sales on Nissan.
Private equity firms which did not bid to buy Calsonic were concerned about its excessive reliance on Nissan for its revenue, and limited growth potential for the auto parts it makes, according to sources.
But as more Japanese automakers dismantle their supplier groups, Calsonic has been trying to grow its client base away from Nissan. It now counts Renault (RNSDF)—which owns 44% of Nissan—Isuzu Motors (ISUZY) and other automakers as clients.
KKR had also been interested in buying Takata (TKTDY), the Japanese parts maker at the centre of the world’s biggest auto recall, but the buyout firm was no longer in the bidding, sources told Reuters earlier this month.
Calsonic shares were untraded earlier on Tuesday after the company said it would discuss Nissan’s stake sale at its board meeting. The shares closed at 1,450 yen, up 9.7%.
Nissan shares closed down 1.4%.
