Delphi and Collins & Aikman as new “super supplier”? This question was posed in Plasteurope.com 20, dated 6 October 2005. The reference was to possible plans by private equity fund WL Ross & Co (New York City / USA; www.wlross.com), backed by investor Wilbur L. Ross, to merge the two insolvent companies Delphi (Troy, Michigan / USA; www.delphiautomotive.com) and Collins & Aikman (C&A, Troy, Michigan / USA; www.colaik.com).

To the surprise of almost everyone, leading automotive interior systems supplier Lear (Southfield, Michigan / USA; www.lear.com) has joined forces with Ross to pursue the partial or complete acquisition of Collins & Aikman. A framework agreement has been drafted, and conditions of the proposed joint venture currently are being negotiated. The aim is to establish the world´s leading supplier of automotive interior systems.

Lear would bring into the jv its Interior Systems business segment, for which new strategic options were being sought anyway – see PIE 20, 2005 – but the seating and electrical & electronics businesses would remain with Lear. Ross would contribute capital to fund acquisitions, while Franklin Mutual Advisers – part of the Franklin Templeton Group (www.franklintempleton.com), also a party to the framework agreement, has agreed to co-invest.

The merged Lear and C&A would have combined annual sales of USD 5.5 bn. But the plans being hatched may extend much farther. If speculation in the US financial press proves correct, that the jv partners already have their eyes on tier 2 and other interior components producers, an even bigger automotive supply giant could be lurking on the horizon.