(Reuters) – U.S. automotive parts maker Visteon Corp (VC.N) has signed a preliminary deal to sell its controlling stake in South Korea’s Halla Visteon Climate Control Corp (018880.KS) to a local private equity firm for $3.6 billion, Korean media reports said.
The reports sent Halla Visteon shares tumbling as much as the daily limit of 15 percent on Monday on worries that the new owners may not maintain its current dividend payout, and that a deal could weaken ties between it and key customer Ford Motor Co (F.N), which used to own Visteon, analysts said.
The Korea Economic Daily said on Monday Visteon plans to sign a final deal to sell its 69.99 percent stake in Halla Visteon to Hahn & Company next month, without citing the source of the information. The deal value was estimated at around 4 trillion won ($3.6 billion), the report said.
Other media reports also mentioned the deal.
Officials at Visteon, Halla Visteon and Hahn & Company declined to comment.
In 2011, Visteon was under pressure from hedge fund investors to split its businesses, as they looked to take profits home after rescuing the U.S. parts maker from bankruptcy following the global financial crisis.
Visteon said in May this year that it would sell most of its automotive interiors business to private equity firm Cerberus Capital Management LP as it focuses on its fast-growing climate control and electronics operations.
South Korea’s Hyundai Motor Group is also a major customer to Halla Visteon.
Halla Visteon, which makes heating and cooling systems for vehicles, was founded as a joint venture between Ford and Mando Corp (204320.KS) in 1986, but Mando sold its stake to Visteon as the South Korean company struggled with the Asian financial crisis in the late 1990s.