The Chinese buyer of Ontario-based auto parts maker Wescast Industries Inc. is aiming to create new production jobs in Canada as it expands the company’s product lineup.
Dong Ping, chairman and chief executive officer of Sichuan Bohong Industry Co. Ltd., said his company, which also makes car parts, is using the acquisition to gain access to the North American market through Wescast’s “clients and experience and management.”
One of Wescast’s most attractive features is its management team's wealth of experience, said Mr. Dong, and Sichuan Bohong has “every intention of keeping them… as well as the employees. They do not plan to have any layoffs.”
“It is very possible to hire more people to help [with]the production of the new products,” Mr. Dong said in an interview on Monday, following the signing of a memorandum of understanding. His comments were translated from Mandarin by an interpreter.
Sichuan Bohong Industry Co. Ltd. agreed last week to acquire Wescast in a transaction worth $201.4-million. While the deal’s final value is expected to fluctuate a bit by the closing date, both parties estimate the transaction is worth about $13.60 a share.
Mr. Dong didn’t say what new products are being planned for Canadian production. But Ed Frackowiak, Wescast’s chairman and chief executive officer, pointed out that Sichuan Bohong makes a number of complementary auto parts, such as engine, steering and brake components, out of the same kinds of materials Wescast uses.
“I think the opportunity is expanding our range of product,” Mr. Frackowiak said. “You know, we’ve been for many years criticized as having too small a product menu. And that’s our strength, because we are very good at what we do, but it is also our weakness.”
Wescast already has a plant in China and the two companies will spend the coming months developing an integration plan, he said. Following the acquisition, Mr. Frackowiak plans to remain with the company.
While Sichuan Bohong hopes to close its acquisition by Dec. 30, the transaction remains subject to a number of conditions, including obtaining court and shareholder approvals.
Monday’s signing ceremony, which was also witnessed by a number of government officials, was hailed by the Canada China Business Council as “an important milestone in the diversification of Chinese investment into Canada,” which has traditionally focused on natural resources.