Japan’s U-Shin May Buy Valeo’s Auto Latch Unit

France's Valeo SA has announced it is in talks to sell its access mechanism unit, which makes auto locks, latches and door handles, to Japanese supplier U-Shin Ltd.

Valeo says it has submitted a sale plan to its labor representatives and anti-trust authorities. The parties expect to reach a final agreement by early 2013, The Nikkei reports, without citing its sources.

The mechanisms business, which is part of Valeo's comfort and driving assistance systems business, has 12 plants and 4,500 employees. The unit generated revenue of €620 million ($776 million) last year, about 5% of the company's total sales.

Valeo says divesting the unit is part of its strategy of focusing on systems that reduce carbon dioxide emissions and on expanding its presence in Asia and emerging markets.

The French company says the acquisition would make U-Shin the world leader in access mechanisms. The deal would more than double U-Shin's revenue and boost its global share in that segment to about 30% from 6%, according to The Nikkei.