Automotive cable systems provider Leoni (Nuremberg / Germany; www.leoni.com) has acquired a 51% stake in its Chinese competitor Wuhan Hengtong Automotive (Wuhan, Hubei / China), as part of its goal to drive growth in Asia. Having recently signed the relevant agreements, the two companies expect the deal to close by the end of this year.

The acquisition will give Leoni access to China’s second largest automotive producer, Dongfeng Motor. Wuhan Hengtong’s plant in Wuhan – located about 700 km west of Shanghai – will initially supply electrical systems to Dongfeng-PSA joint venture Dongfeng Peugeot-Citroën Automobile (DPCA), and at a later stage to Dongfeng itself, too.

Wuhan Hengtong’s electrical cable systems production plant is home to about 1,000 employees. The company is targeting revenues of EUR 35m in 2016 – a figure that Leoni says is expected to rise to a triple-digit million euro amount in the medium term.

The German OEM on 14 September lowered its EBIT forecast for 2016 following a case of fraud. Leoni is reportedly looking into compensation claims, but for now has put the damages at about EUR 40m – which will impact mostly its Q3 EBIT. With a view to full-year 2016, Leoni has lowered its EBIT expectation from EUR 105m to EUR 65m, with revenues anticipated to remain at EUR 4.4 bn.