KOMAKI CITY, Japan—Tokai Rubber Industries Ltd. has agreed to buy Italian automotive hose maker Dytech Dynamic Fluid Technologies S.p.A., giving it the opportunity to expand into Europe and South America.
The company also announced its joint venture with Imperial Auto Industries Ltd. in India will build a plant to make high-pressure hydraulic hose for the construction industry.
The tentative purchase of Dytech—scheduled to be signed Dec. 19—will give Tokai a Turin, Italy-based manufacturer that operates in nine countries, employs 3,500 and had 2011 sales of $408.2 million, the Japanese company said. Tokai itself is a major automotive hose maker, with production in Japan and seven other nations, mostly North America and Asia.
The Komaki City-based firm said acquiring Dytech will give it local production in regions where it is absent, providing new customers and allowing Tokai to take another step toward global production. Dytech's primary customers are European auto manufacturers, and it has operations in Italy, Brazil, Turkey, Tunisia, China, Russia, Argentina, Serbia and Mexico.
Tokai said closing the acquisition is subject to government clearances. The company didn't give a purchase price.
Dytech's primary shareholders are Athena Private Equity S.A. (49.4 percent), Compagnia Italiana Ristrutturazioni Industriali S.R.L. (33 percent) and Iniziativa Gestione Investimenti Societa di Gestione del Risparmio S.p.A.
In India, Tokai said it will be the first Japanese company to become a full-scale manufacturer of high-pressure hydraulic hose in that nation.
Tokai formed a joint venture with Imperial Auto Industries—one of India's major hose makers—in September 2011, and the two companies made additional financial contributions last February.
The joint venture will build the hose plant in Neemrana. Tokai said it also will open assembly facilities in Bangalore and Kharapur.
The new joint venture facility will be Tokai's third overseas production site for hydraulic hose—plants in China and Russia are the other such operations.