Cleary Gottlieb counsels Tupy on Teksid acquisition

Cleary Gottlieb Steen & Hamilton has acted as legal counsel to Tupy, a Brazil-based manufacturer of cast iron structural components, on its acquisition of Fiat Chrysler Automobile’s (FCA) global cast iron automotive components business, which is operated through FCA’s subsidiary Teksid.

The proposed transaction includes Teksid’s production facilities in Brazil, Mexico, Poland and Portugal, in addition to Teksid’s interest in a joint venture in China, Teksid’s engineering office in Italy and the sales office in the US.

Teksid’s aluminum business is not included in the transaction and will remain part of FCA.

The amount payable by Tupy to FCA at closing is €210 million (approximately $232 million), and is subject to customary purchase price adjustments. The deal is subject to customary closing conditions, including the receipt of anti-trust approvals.

The acquisition will enable Tupy to expand its business and more successfully manage future industry challenges, the company said in a statement.

Following the acquisition, the combined companies would have more than $1.6 billion in annual revenues and more than 20,000 employees.

“We are looking forward to welcoming our colleagues from Teksid to build together an even stronger company for the future,” Tupy’s CEO Fernando de Rizzo (pictured) said.

“The proposed combination of assets, people and knowledge will enable a significant increase in our ability to develop new technologies and deliver superior value-added products and services to our customers worldwide.”

The transaction is also expected to strengthen Tupy’s strategic partnership with FCA, which will remain a significant customer of the combined Tupy and Teksid group following closing of the acquisition.

Brazilian law firm Mattos Filho acted as local counsel to FCA.

Morgan Stanley acted as exclusive financial adviser to Tupy, while JP Morgan provided the acquision financing to the company.