South Korea’s Hanon to buy Magna’s electronics unit for $1.23 billion

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The Canadian supplier Magna International Inc. said it plans to sell its electronics unit to Hanon Systems in South Korea for about $ 1.23 billion.

Hanon said the deal marks one of the biggest purchases of a overseas auto parts maker by a South Korean company, and aims to increase its product lineup for electric vehicles.

Magna said that its worldwide operations in fluid pressure and control systems produce mechanical and electronic pumps, electronic cooling fans and other components. The unit generated $ 1.4 billion in sales in 2017. Magna said that about 4,200 employees will switch to Hanon Systems at 10 operations in North America, Europe and Asia.

"With this transaction, Magna's powertrain activities will continue to focus on delivering power to the wheels as a system supplier of transmission and other powertrain-related systems, including electrified versions," Magna said in a statement.

The transaction is expected to be completed in the first quarter of 2019, according to the statement.

Reuters contributed to this report