Mumbai: French car parts maker Valeo has started negotiations with Leoni, a world leader in the wiring business for different industries, for a possible sale of its wiring harness activity, Valeo Connective Systems.

The divestiture of the wiring harness activity, which generated sales of €545 million ($743.3 million) and an EBITDA of €36 million in 2006, is in line with Valeo''s strategy to focus its product offer on solutions in the domains of driving assistance, powertrain efficiency and comfort enhancement, the company said in statement.

Valeo Connective Systems currently employs 11,700 people at 12 industrial sites, including 9 in cost-competitive countries at 30 June 2007.

The sale is subject to consultation with employee representative committees and approval by the antitrust authorities and the negotiations are expected to be completed by the year-end.

Leoni is a world leader in the wiring business for different industries, and the acquisition of Valeo Connective Systems would make it European leader for automotive wiring with a broad customer base.

Valeo''s biggest shareholder is US hedge fund Pardus, and Pardus is putting pressure on the company for a strategy review. Valeo had, earlier this year, called off buyout talks with investment funds after failing to agree on a price.