Tuesday, August 21, 2007

Eberspaecher eyes DaimlerChrysler's Purem diesel business

Robert Sherefkin
Automotive News
August 20, 2007 - 12:01 am EST

At a glance
Here's a look at Eberspaecher GmbH & Co. KG.
  • President: Heinrich Baumann
  • Headquarters: Esslingen, Germany
  • 2006 global original-equipment sales: $2.20 billion
  • Products: Exhaust systems, catalytic converters and filters
  • North American headquarters: Novi, Mich., near Detroit
  • 2006 North American original-equipment sales: $308 million
Source: Automotive News Data Center German exhaust system supplier Eberspaecher is in advanced talks to acquire a DaimlerChrysler-owned company.

Eberspaecher GmbH & Co. KG, a global supplier of exhaust systems, wants to buy part or all of diesel exhaust treatment systems supplier Purem Abgassysteme GmbH & Co. KG, of Unna, Germany, according to sources familiar with the discussions.

A deal could unite two diesel exhaust treatment suppliers. Both have operations in Europe and North America. No deal has been announced and no terms have been disclosed.

The talks come amid a worldwide push to reduce automotive pollutants and greenhouse gas emissions.

It's not clear why Purem, 100 percent owned by DaimlerChrysler since March 2003, is on the block. DaimlerChrysler spokeswoman Kathrin Wittmann says the company "could not comment on any speculation of the sale of Purem."

Eberspaecher's president in North America, Dennis Berry, could not be reached. Purem spokesman Larry Dimitrievski says he is unaware of any talks.

'We're building up'

Purem's technology is aimed at light- and heavy-duty diesel engine emissions systems. So it is positioning itself to meet future emission limits such as the 2010 EPA standards in the United States and the Euro 5 in 2008 in Europe.

Still, Purem remains a small company despite parent DaimlerChrysler's ownership of large diesel business units. Those units include engine maker Detroit Diesel, heavy-truck maker Freightliner LLC and Thomas Built Buses Inc.

Asked about Pruem's future in North America, Dimitrievski says: "We're building up our plant to support higher production volume."

He says Purem North America currently supplies diesel exhaust filters to DaimlerChrysler in Europe and North America. The company says it does not disclose revenue.

Meanwhile, Eberspaecher, based in Esslingen, Germany, supplies exhaust systems to most European passenger car and commercial vehicle makers. Eberspaecher ranks No. 68 on the Automotive News list of the top 100 global suppliers with worldwide original-equipment automotive parts sales of $2.20 billion in 2006. About 80 percent of its revenue comes from exhaust systems.

Stiff competition

Eberspaecher of North America LLC supplies light-vehicle exhaust systems and catalytic converters, primarily for Chrysler. The company's North American original-equipment business grew by 32 percent in 2006 to $308 million, according to the Automotive News list of the top 150 suppliers to North America.

Eberspaecher has focused on preparing its truck exhaust gas after-treatment systems to comply with the EPA's 2010 regulations to reduce nitrogen oxides. These oxides form when fuel is burned at high temperatures, as in a combustion process. The primary man-made sources of NOx are motor vehicles.

Competition in the business is tough. When the Detroit 3's diesel treatment contracts came up for bid in 2005, Tenneco Automotive Inc. of Lake Forest, Ill., gained considerable new business. The launch of diesel versions of the Ford F-250 and F-350 pickups, Dodge Ram pickup and General Motors' Duramax engine this year has been a "huge revenue source," says a Tenneco spokeswoman.

Tenneco, Purem and Eberspaecher were partners in Bluetec, DaimlerChrysler's name for its two NOx reducing systems for use in diesel auto engines. c

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