Valeo has agreed to acquire German clutch and and gear actuators maker FTE automotive from Bain Capital Private Equity for €819.3m.
Subject to the approval of the European and Brazilian anti-trust authorities, the transaction is anticipated to close in the fourth quarter of this year or in the first quarter of 2017.
The acquisition will strengthen Valeo's aftermarket business and enable the company to expand its offering of active actuation systems for transmissions.
FTE automotive generated about €500m in sales in 2015, of which a third were in the aftermarket business, and 30% outside Europe.
The company employs 3,700 people with a industrial footprint in eight countries that include Germany, the Czech Republic, Slovakia, Mexico and China.
Valeo chairman and CEO Jacques Aschenbroich said: "The acquisition of FTE automotive is perfectly aligned with Valeo's CO2 emission reduction strategy.
"FTE automotive is a fast-growing company and a technological leader with a proven ability to combine growth and profitability. It will strengthen Valeo's Powertrain Systems Business Group."
FTE automotive Group CEO Andreas Thumm said: "The combination of FTE automotive and Valeo is an excellent fit which offers new future opportunities for our company."
In 2015, Valeo generated sales of €14.5bn and invested more than 10% of its original equipment sales in research and development.
The company has 134 plants, 17 research centers, 35 development centers and 15 distribution platforms. It has 82,800 employees in 30 countries globally.
