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Nemak, J.L. French in Combination of Aluminum Auto Parts

April 12, 2012
Acquisition links producers of engine blocks and transmission parts

Monterrey-based automotive foundry Nemak has an agreement in place to acquire privately held J.L. French Automotive Castings Inc., a manufacturer of high-pressure aluminum diecastings. The value of the purchase was not announced, and the transaction remains subject to regulatory approvals. Nemak CEO Manuel Rivera said the purchase “will broaden our product portfolio to better serve our customers' needs."

J.L. French chairman, president, and CEO Tom Musgrave explained, “This acquisition will allow J.L. French to thrive under the new ownership of a company that has a high stake in our success. This transaction will provide long-term financial support for J.L. French with an automotive supplier parent company.”

Both companies produce cast aluminum components for automakers, though Nemak specializes in aluminum cylinder heads, engine blocks and transmission parts, and J.L. French is particularly focused on transmission parts.

"This acquisition offers attractive growth opportunities in aluminum transmission components. Furthermore, J.L. French's technology will facilitate our entrance into other high-value added products, such as suspension and structural parts," stated Alvaro Fernandez Garza, president of Grupo ALFA, the conglomerate that owns Nemak.

The move is the first large acquisition for Nemak since it purchased Fiat SpA’s Teksid operations in 2007. It also bought plants from Norsk Hydro in 2006 and Rautenbach in 2005, as it assembled a chain of 27 operations in North and South America, Europe, and Asia. Last year it reported revenues of $3.602 million and it has 18,000 workers.

J.L French had approximately $500 million in 2011 revenue, and has over 1,900 employees. It operates two aluminum diecasting plants in Sheboygan, WI, and another in Glasgow, KY. Overseas, it has a plant in Etxebarria, Spain, J.L. French Ansola S.R.L., and a joint venture in China, Chongqing JL French-Yumei Die Casting Co. Ltd., at Dazhulin, in Chongqing. The company completed a pre-arranged reorganization in 2006.