Per a Reuters news, Genuine Parts Company GPC has announced that it is entering the European market. The Atlanta, GA-based distributor of automotive and industrial replacement parts’ company is doing so by purchasing London-headquartered Alliance Automotive Group for $2 billion, including debt.
The deal is anticipated to be completed in fourth-quarter 2017. It will enable Genuine Parts to directly take on its rival LKQ Corporation LKQ. Notably, Chicago, IL-based LKQ Corporation is the largest automotive parts’ distributor in the European light vehicles aftermarket. Two other top companies in the European light vehicle aftermarket are UK-based Parts Alliance and Poland-based Inter Cars.
Alliance Automotive Group distributes parts for commercial and light vehicles in the United Kingdom, France and Germany. It employs 7,500 people and has over 1,800 stores and affiliated outlets in Europe.
Genuine Parts operates through 7,300 stores with presence in the United States, Canada, Mexico and Australia. The company derives over four-fifth of its annual revenues from the United States.
The deal is anticipated to be accretive to Genuine Parts going forward. It is projected that the deal will add 65 to 70 cents per share to Genuine Parts' adjusted earnings in 2018.
Two companies in the auto space include Toyota Motor Corporation TM and Volkswagen AG VLKAY.
Toyota has a long-term growth rate expectation of 7%.
Volkswagen has an expected long-term earnings growth rate of 8.9%
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