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UPDATE 1-Tesma to buy U.S. powertrain company, boost EPS

(Figures in U.S. dollars)

MONTREAL, Dec 18 (Reuters) - Tesma International Inc. , a Canadian automotive engine and transmission parts maker, said on Thursday it will buy privately held U.S. automotive supplier Davis Industries Inc in a deal that will increase its profits.

Financial details were not disclosed, but Tesma, a unit of Magna International Inc. , said in a release that Davis sales were $129 million in fiscal 2003.

The deal is expected to close on Jan. 2, 2004. Tesma intends to pay for it with cash and by assuming some Davis debt.

The Concord, Ontario-based firm said the deal should boost earnings per share by more than 10 cents on an annual basis.

Plymouth, Michigan-based Davis employs more than 700 people in three manufacturing facilities in Indiana and Tennessee, and one engineering center in Michigan. Its main products are stamped powertrain components and assemblies.

($1=$1.33 Canadian)