SAO PAULO- Brazilian auto parts company Tupy said on Monday it has signed a deal to acquire motor maker MWM, formally known as International Industria Automotiva da America do Sul.

The deal has an enterprise value of 865 million reais ($184.2 million), Tupy said in a securities filing.

MWM is currently owned by Navistar, a subsidiary of Germany-based vehicle maker Traton SE. It reported an operating net revenue of 2.7 billion reais in 2021, according to Tupy.

The company manufactures engines for Brazilian, European and North American trucks, buses and machine makers, and also converts motors to allow them to run on natural gas, biodiesel, biogas and biomethane, Tupy said.

"This transaction is in line with Tupy's growth strategy both in current businesses, by adding value to its products, and in promoting viable decarbonization solutions, benefiting from the high potential for biofuels (in Brazil)," it added.

Tupy said it is evaluating the capital allocation strategy to pay for the deal, taking into account third-party funding as well as its own resources.

The transaction still requires approval from Brazil's antitrust watchdog CADE.

($1 = 4.6965 reais)

(Reporting by Gabriel Araujo; Editing by Kirsten Donovan and Jan Harvey)