(Yicai) May 14 -- Dongshan Precision Manufacturing, a Chinese maker of printed circuit boards, optoelectronic displays, and precision components, plans to spend EUR100 million (USD112 million) acquiring leading French auto parts supplier Groupe Mécanique Découpage.

Dongshan Precision will make a discounted cash payment to acquire GMD and extent a shareholder loan to help pay off the target firm’s debts with three creditors, while the other creditors have agreed to forgive all remaining outstanding principal and interest, the Suzhou-based firm announced yesterday.

GMD has total debt of EUR363 million, which includes syndicated loans, corporate loans, and bonds, Dongshan Precision said.

The acquisition will swell the share of Dongshan Precision’s revenue coming from car parts and help it establish a foothold in the European market, the firm noted, adding that it will leverage GMD’s overseas assets and customer network to reach more global auto clients.

GMD has 46 factories across 12 countries in Europe, Asia, and Africa. It employs more than 6,600 people in three main divisions: Eurostyle Systems for plastic and leather components, GMD Eurocast for casting parts, and GMD Stamping for stamping components.

Last year, GMD reported revenue of EUR1 billion (USD1.1 billion) and net profit of only EUR3 million (USD3.4 million), with a year-end equity of just EUR15 million (USD16.8 million), Dongshan Precision said, citing unaudited figures.

Dongshan Precision’s 2024 revenue was CNY36.8 billion (USD5 billion), with the printed circuit board and precision parts businesses contributing over 67 percent and 12 percent, respectively, according to its latest annual earnings report. Its precision parts business includes global electric carmakers and telecom gear producers among its clients.

The company’s display panel and devices business, which accounts for nearly 20 percent of total revenue, also counts automakers among its major customers.

Shares of Dongshan Precision [SHE: 002384] closed 0.1 percent down at CNY28.45 (USD3.94) each in Shenzhen today, after earlier gaining by as much as 3.5 percent. The Shenzhen Component Index rose 0.6 percent.

Editor: Futura Costaglione