BMW has bought a 15 percent stake in SGL Carbon SE, becoming the third company in nine months to invest in the world’s largest maker of carbon and graphite products, strategic materials for the car industry and rebuffing Volkswagen's attempt to control more of the company. The new i3 and i8 models are largely composed of carbon fiber.
BMW didn’t rule out buying additional shares and SGL shares jumped as much as 7.8 percent in Frankfurt, valuing the stake at 474 million euros ($641 million), BusinessWeek reports.
Competitor Volkswagen announced it bought an 8.2 percent stake in SGL in March, prompting speculation the carmakers may fight for control of SGL. The Wiesbaden-based company started making brake discs for carmakers including Porsche AG more than a decade ago and now makes carbon-fiber reinforced plastics for the industry. BMW’s biggest shareholder, German billionaire Susanne Klatten, controls almost 29 percent of SGL.
“It appears the strategic importance of future lightweight materials is too significant in order to allow a major competitor potentially taking control,” said Arndt Ellinghorst, an analyst with Credit Suisse in London.
SGL rose 5.1 percent to 45.35 euros at 11:36 a.m. local time. The shares have risen 68 percent this year, making them the best performer in Germany’s 50-member MDAX benchmark index for medium-sized companies. BMW fell 1.4 percent to 53.75 euros.
SGL produces electrodes and cathodes for the metals industry as well as furnace linings, and is developing carbon fibers and composite materials for the automotive and aerospace industries.
Still, the company’s sales to automotive customers amounted to less than 5 percent of total last year, spokesman Tino Fritsch said. “We are a materials specialist, not an automotive supplier,” he said.
SGL Chief Executive Officer Robert Koehler said he expects to generate “substantial” revenue with automotive and aviation industry clients, starting in 2013. The company expects sales to automotive customers will likely be between 10 percent and 15 percent of total revenue in coming years, Sueddeutsche Zeitung said May 30.
The company started a joint venture with BMW in 2009 to manufacture carbon fibers and fabrics for the automotive industry. Such material is seen as key to help carmakers build cars that are lighter and more fuel-efficient yet as safe as models built with more steel.
BMW didn’t disclose the financial details of the transaction, but said that it’s not seeking a seat on SGL’s supervisory board.—Paul Duchene