Apple sold its auto parts maker to a local auto parts supplier on Monday, with the transaction valued at more than $3 billion, according to Reuters.
The sale comes as Apple looks to increase its presence in the auto parts industry after a long battle with competitors including Ford Motor Co and General Motors Co. Ford has recently been exploring ways to increase volume of its own auto parts sales with plans to open more locations, while GM has been trying to build its own automotive parts operations, though those efforts have been halted due to a number of regulatory issues.
While the deal is expected to generate more than half of Apple’s total revenue, the company has also been exploring other ways to grow its auto supply chain and has already purchased parts from a variety of suppliers.
It currently has a handful of suppliers that have significant manufacturing expertise and a large amount of customer relationships, but it’s expected to seek more outside assistance in future acquisitions, Bloomberg reported.
The deal also includes the acquisition of auto parts provider FrankenAutoParts, which will be renamed Auto Parts Corp. and will be headquartered in Japan.
FrankenAutoPart is currently a wholly owned subsidiary of Japanese auto parts manufacturer Suzuki Automotive.
The deal also contains $2.5 billion in cash, according the Wall Street Journal.
Apple is also expected to make a bid for auto parts producer Cairn, which is a joint venture between Japan’s Mitsubishi and German automaker Daimler AG, which have a joint production facility.
The company is currently developing a self-driving electric vehicle, which it expects to launch later this year.
Apple has been looking to increase the number of places it can sell its car parts, with recent reports indicating it has been actively shopping around for suppliers.
Earlier this month, Bloomberg said it had reached out to auto parts companies and had been given a list of suppliers with a combined annual sales of more than 2.5 million units.
The auto parts firms also told Bloomberg that Apple was interested in a larger share of the company’s revenue.
In the case of FrankenAutomParts, the sale will come as Apple is working on expanding its presence as a car parts supplier.
The San Francisco-based company was founded in 2013 by Franken Automotive CEO Yuichi Ishikawa and is owned by Mitsubishis parent company Toyota Motor Corp.