Buyout firm KKR (KKR) said it would make a tender offer to wholly acquire Calsonic Kansei, a car components affiliate of Nissan Motor (NSANY) , for ¥498.3 billion ($4.5 billion), in a bid to boost the competitiveness of the supplier participating in a market growing at a pace of 15% a year as automakers rapidly venture into electric vehicles and self-driving cars.
The agreement, announced on Tuesday, includes the New York-based KKR buying 40.68% of Calsonic Kansei's shares from Nissan. KKR will start the tender offer in February 2017, with a plan to pay ¥1,860 per common share, which represents about a 28% premium to Calsonic Kansei's Tuesday closing price of ¥1,450.
Other shareholders in Calsonic Kansei include Goldmans Sachs (GS) and Norway's sovereign wealth fund.
Calsonic Kansei is KKR's largest Japanese acquisition to date. Three other purchases in the country -- Intelligence, Panasonic Healthcare and Pioneer DJ -- were all valued below $1 billion.
The announcement was made after the markets closed in Japan. Calsonic Kansei shares closed up 9.7%. The company's shares have jumped 36% in the past 12 months.
With the acquisition, KKR aims to make investments in plants and equipment, seek M&A transactions and help expand the company's customer base as well as boost the profitability of its products.
Nissan, which is Calsonic Kansei's largest customer, said the sale was aimed at boosting the supplier's competitiveness during a time of increasing demand to incorporate more electronics and intelligence into vehicles, as that would ultimately lead to boosting Nissan's own competitiveness. The automaker also highlighted increasing need to address globalization, safety, quality and environmental regulations.