Onex buys into $5.6B takeover of transmission company

Posted in finance | Thursday, July 26th, 2007 | Trackback
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Canadian conglomerate Onex Corp. and U.S. private equity firm The Carlyle Group have teamed up to buy Allison Transmission from GM for $5.6 billion US.

General Motors had announced back in January that it wanted to sell Allison as part of its restructuring planto raise money and concentrate on its core business of vehicle production. Onex Corp. three-month trading

The sale includes Allison’s seven manufacturing plants in Indianapolis. Allison, which makes transmissions for commercial trucks, buses and military vehicles,has annual revenues of more than $2 billion US and employs 3,400 people.

“Allison should enjoy continued growth as the adoption rate of automatic transmissions in commercial vehicles continues to grow,” said Onex managing director Seth Mersky in a release.

Onex and The Carlyle Group will each make an equity investment of$750 million US. The Onex side of the investment is being made by Onex Partners II the company’s large cap private equity fund.

Onex shareholders appeared to like the deal. The stock was up $1 at $36.66 in early TSX trading.

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