The deal is in line with Toray's aim to speed up the development of technology to match growing demand in aircraft applications of carbon fibre.

"The demand for medium- and small-sized, single-aisle aircraft is growing significantly and the development of the next-generation aircraft targeting such demand is expected to intensify," Toray said in a statement. http://bit.ly/2GrtT76

TenCate manufactures thermoplastic prepreg, a material that improves efficiency of molding. Toray expects demand for the material to increase in line with demand for medium and small-sized mass-produced aircraft.

Toray has been building its carbon-fibre business, beginning with the 2013 acquisition of U.S.-based Zoltek Companies for $584 million.

The deal, which is expected to be completed in the second half of 2018, is subject to approvals by regulators, TenCate said in a separate statement, adding that Toray expects to retain key management of TCAC following completion of deal.

(Reporting by Chris Thomas in Bengaluru; Editing by Stephen Coates)