(Reuters) -Auto parts supplier Aptiv (NYSE:APTV) Plc said on Tuesday it would acquire a majority stake in a unit of Italy' Intercable for 595 million euros ($605.71 million), allowing the U.S. company access to technology used in electric vehicles (EVs).
Aptiv will own an 85% stake in the unit, Intercable Automotive Solutions, which manufactures high-voltage busbars that carry more electrical power than traditional cables. It has manufacturing facilities in Europe and Asia.
"Intercable Automotive Solutions is an excellent strategic fit with Aptiv's Signal & Power Solutions segment," Aptiv Chief Executive Officer Kevin Clark said in a statement.
Auto parts suppliers are increasingly investing in electric and battery technology to cater to the EV market, which could be worth $5 trillion over the next decade.
Aptiv, which counts Tesla (NASDAQ:TSLA) Inc and General Motors Co (NYSE:GM) as customers, in January announced a multi-billion-dollar deal for software developer Wind River to capitalize on the shift to software-oriented vehicles and diversify its revenue stream.
The deal also comes amid automakers' effort to replicate the success of Tesla's electric vehicles, as they replace 12-volt wiring systems with much higher voltage cables.
Aptiv's deal for Intercable Automotive is expected to close before the end of this year, following which the company will operate as a stand-alone business unit.
The transaction is expected to add to Aptiv's earnings next year. Shares of the company were down 2.7% amid a broader fall in market after data showed monthly U.S consumer prices unexpectedly rose in August.
Goldman Sachs & Co (NYSE:GS) LLC served as financial adviser for the deal to Aptiv while Clifford Chance was the company's legal adviser.
($1 = 0.9823 euros)