updated 9/1/2006 4:40:27 PM ET 2006-09-01T20:40:27

Japanese auto parts maker Asahi Tec said Friday it will buy U.S. rival Metaldyne Corp. for $1.2 billion. News of the acquisition sent Asahi Tec's shares surging nearly 22 percent.

Asahi Tec announced the decision to buy the Michigan-based auto parts company following a meeting of its board of directors, the company said in a statement.

The deal by the Shizuoka-based company is the latest sign that Japanese auto components suppliers are expanding their North American presence, as Japanese car makers increase production volumes to keep up with growing sales in the world's biggest auto market.

"Asahi Tec will gain access to Metaldyne's value-added engineering, design and manufacturing capabilities," the company said in the statement. "The transaction will enable Asahi Tec to further expand its global reach with Metaldyne's significant operations and presence in North America, Europe, China and Korea and growing business in India and Brazil."

Metaldyne said the acquisition will allow both companies to benefit from growth in emerging markets in Asia, North America and Europe.

"Metaldyne and Asahi Tec have come together to create a stronger, more globally competitive company," Metaldyne Chairman, President and CEO Tim Leuliette said in a statement. "All our customers, employees and investors are better served by a stronger, better capitalized, more globally capable company."

Asahi Tec's shares jumped 21.79 percent to 313 yen on the Tokyo Stock Exchange on reports of the acquisition plan Friday.

Asahi Tec, in which RHJ International owns a 63 percent stake, posted group sales of 58 billion yen in the last fiscal year ended March.

The maker of aluminum wheels and engine parts said that Metaldyne's principal shareholders are to subscribe to newly issued shares of Asahi Tec via a third party allotment.

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