Picture: ISTOCK
Picture: ISTOCK

On Friday, battery and automotive components maker Metair confirmed media reports that it was seeking to acquire Slovenia-based battery maker Tovarna Akumulatorskih Baterij (TAB).

This is part of its strategy to achieve a 10% market share of the global vehicle battery market.

Metair has been seeking to expand its presence in the battery market amid shifting focus away from fossil fuels globally, saying in its cautionary statement on Friday that the acquisition would greatly improve its vertical manufacturing capacity in the battery sector.

Metair had identified TAB as a "scarce strategic asset" in the sector, with the company having significant research and development expertise in lithium-ion and electric vehicle batteries.

The total purchase consideration was €300m.

The company has shifted its strategic focus towards energy storage, and is seeking to produce 50-million batteries for vehicles of various types by 2020.

Earlier in 2018, Metair had reported revenue growth of 6.3% to R9.5bn for the year to end-December, largely due to the performance of its Turkey-based battery plant.

The batteries businesses in Turkey and Romania had grown 31% in local currencies, but this was reduced to 21.1% when accounting for a stronger rand.

Metair’s battery business makes up 59% of group revenue and 58% of operating profit, respectively.

Automotive components make up 41% of group revenue and 42% of operating profit, with the company making its acquisition in Turkey in 2012, and its acquisition in Romania in 2018.

After initially trading higher after the announcement, Metair’s share price was down 0.2% to R19.97 at 10am. The share has lost 7.12% so far in 2018.