The owner of the Repco car parts business has sold off a third of its holdings to an American car parts company.

Melbourne-based Exego Group owns the Repco brand which was founded in 1922.

It also owns three other automotive businesses – Ashdown Ingram, McLeod Accessories and Motospecs – has more than 430 stores across Australia and employs more than 3,800 people.

Exego on Tuesday announced it had agreed to issue new shares to Genuine Parts Company, based in Atlanta, Georgia, which will represent a 30 per cent stake in Exego, for about $US150 million ($A152.77 million) in cash.

Under the agreement, Genuine Parts Company will have the option to acquire the remaining shares in Exego Group at a later date if the Australian company meets certain earnings targets.

Exego managing director John Moller said the two companies had had an informal working relationship for the last 20 years.

“Genuine Parts Company is a natural long-term owner with a commitment to growth in this industry, and we intend to use the injected funds to pursue this objective,” he said in a statement.

Genuine Parts Company chief executive Thomas Gallagher said the strategic stake in Exego gave it greater opportunities to be part of the long-term growth in the Australian and Asian automotive parts markets.