Mexico's Alfa buys TK Aluminum plants for $500 mln

MEXICO CITY, Nov 2 (Reuters) - Mexican conglomerate Alfa agreed on Thursday to buy auto parts plants in five countries from Bermuda-based holding company TK Aluminum for $500 million, plus an equity interest in Alfa's car unit Nemak.

Alfa, one of Mexico's biggest conglomerates also with interests in petrochemicals and processed food, said the acquisition will expand its auto parts business in China, Poland, Argentina, Brazil and the United States.

In the deal, Alfa said it will give TK Aluminum a 11.5 percent equity interest in Nemak. It also includes Alfa paying $7 million to restructure TK Aluminum.

Alfa's Chairman Dionisio Garza Medina said Nemak already had a solid position as an aluminum auto parts maker.

"With this transaction, it will expand even more its global presence and its technological base and will diversify its client portfolio," he said in a statement.

Last year, the plants Alfa is acquiring from TK Aluminum had revenues of $700 million and a cash flow generation of around $100 million.