South African automotive components manufacturer Metair Investments has concluded a share purchase agreement to acquire 100% of Mutlu Holding for R2.17-billion, giving Metair an effective 75% interest in Istanbul-listed Mutlu Akü – the largest battery manufacturer in Eastern Europe and the Middle East. 

The acquisition would further award Metair controlling interests in battery casings and caps manufacturer Plastik, battery distributer Turker Izabe and vehicle fleet owner Metropol, all of which supported the battery manufacturing business.

The implementation of the transaction, which would be funded equally by debt and equity, would require Metair to make a mandatory tender offer to the minority shareholders of Mutlu Akü, as required under Turkish law, for the remaining 25% of issued shares not held by Mutlu Holding.

The company said in a statement that debt facilities would be provided by South African bank Absa, while it had already received commitments from several institutions to subscribe under a private vendor placement for sufficient Metair shares to cover the equity-funded component of the purchase price.

Metair CEO Theo Loock said the acquisition was in line with the group’s strategy of deriving 50% of its business from original-equipment manufacturers (OEMs) and 50% of its business from the aftermarket.

Further, the company aimed to increase the contribution from the sale of batteries to these markets from the current 39.1% of total revenues to 50% of total revenues.

The remaining 50% of revenues would come from the sale of heating and cooling systems, shock absorbers, springs, lighting, signalling devices, plastic mouldings, wiring harnesses and front-end modules to OEMs and the aftermarket.

“This transaction will enable us to capture a greater share of the anticipated growth in the market for start-stop batteries, with a total increased production capacity of 11.7-million batteries a year when combined with subsidiaries First National Battery and Rombat,” he commented.

He said Metair would look to build on Mutlu Akü’s existing OEM relationships to develop the group into a globally relevant OEM and aftermarket automotive battery partner in the East, Middle East and Africa region with access to the European market.

The transaction remained subject to various conditions precedent, including regulatory and shareholder approvals.