The Winterthur-based company, Rieter, is in talks to buy part of a privately held German textile machinery company, Süssen.
Rieter, which operates in the textile machinery and automotive supply sector, said in a statement on Monday that the operations in which it was interested generated annual sales of around SFr200 million ($119 million).
Rieter says Süssen is a market leader in the development of spinning technology for the textile industry and is one of the leading manufacturers of key components for spinning machinery.
A large proportion of the group's worldwide workforce of 1,870 is employed in the Czech Republic and India.
In the 2000 financial year Rieter generated sales of SFr2.9 billion with 12,232 employees worldwide.
The textile machinery business and the automotive supply activities accounted for SFr1,088 million and SFr1,825 million of this total respectively.
swissinfo with agencies