(Bloomberg) ? Alfa SA, Mexico?s second-largest industrial company, said its aluminum subsidiary Nemak will pay $500 million in cash to buy at least six auto part factories from TK Aluminum, its first major acquisition since netting $1.1 billion from the sale of its steel unit last year.

The factories, located in China, Poland, Brazil, Argentina, Mexico and the US, make aluminum castings for automobiles, generated revenue of $700 million in 2005, Alfa said in a statement released last week by e-mail.

?They have cash and they want to redeploy it along the strategic lines of what their remaining core businesses are,? said Jorge M. Beristain, director of Latin American equity research at Deutsche Bank Securities in New York. ?They?re giving more critical mass to the auto sector and consolidating their leadership position, taking advantage of fairly depressed valuations.?

The acquisition forms a part Alfa?s plan to expand overseas, using Nemak as a way to enter China and expand in Europe while broadening its customer base to include Nissan, Hyundai, Renault, Toyota and Fiat, Nemak president Manuel Rivera said in the company?s statement.

Nemak in 2005 sold 85 percent of its auto part products to Ford, GM and DaimlerChrysler. With the new plants, the unit plans to reduce its reliance on those manufacturers, cutting their share of its sales to 36 percent as its overall revenue grows by more than half, said Beristain, who last week attended a presentation by the firm in New York. ?It really helps them with their footprint, since with this acquisition they get some immediate diversification of their client mix,? he said. ?They?re going to have their hands full absorbing an acquisition of this size.?

It?s unlikely additional auto sector acquisitions are in the works, Beristain said, adding deals could follow in Alfa?s petrochemical, food and telecommunications businesses could soon follow. TK Aluminum?s subsidiary Teksid Aluminum will keep a $100 million, 11.5 percent minority interest in the plants, which Nemak will purchase within three years, under the terms of the purchase, said Beristain, who heard details of the deal at the company?s presentation last week in New York.

Alfa, based in Monterrey, Mexico, sold its 42.5 percent stake in steel unit Hylsamex to Argentina?s Grupo Techint for $1.065 billion in August 2005.