UPDATE: Visteon Seeks Remaining Stake in Halla

Visteon Corp. has launched a 913 billion-won ($805 million) tender offer for the 30% South Korea's Halla Climate Control Corp. it doesn't already own.

The Michigan-based company has obtained an $815 million line of credit from Korea's Kookmin Bank to back the tender offer, which will expire on July 24. The deal is contingent on the tender of at least 26.7 million of Halla's 32 million outstanding shares, which would bring Visteon's stake to at least 95%.

Visteon says Korea's National Pension Service, which owns 9.8% of Halla, has not yet decided whether to sell its stock. Reuters reports that Hyundai Motor Co., which accounts for more than 60% of Halla's revenue, doesn't want full ownership of the supplier to go to a non-Korean company.

The deal would create the second-largest supplier in the climate-control segment after Denso Corp., according to Visteon. It estimates that integrating Halla with its climate-control operations would result in savings of about $20 million in the first full year. The U.S. company plans to retain Hella's brand name and Korean management team.

Visteon says it plans to build a $50 million wind tunnel and expand production in Korea of radiators, heater cores and air-conditioning condensers and evaporators. The company also intends to construct the world's largest factory to make variable swashplate compressors at an undisclosed location in Korea.

Separately, Visteon says a deal to sell the majority of its interiors unit to its Shanghai-based joint venture with Huayu Automotive Systems Co. collapsed because of uncertainty about the European auto market. Visteon says it will explore creating a new joint venture with another party or selling some of the interiors business.