Plastic Omnium said it agreed to acquire Faurecia’s automotive exteriors business in a transaction valued at 665 million euros.
in Automotive News Europe, by Kerri Jansen (Plastics News), 14-12-2015
The agreement deal does not include Faurecia’s composites business, its plant for Smart in Hambach, France, or two joint ventures in Brazil and China.
The business to be sold, which includes bumpers and front end modules, had 2014 sales of 2 billion euros, according to a statement released Monday. About 90 percent of the business is located in Europe.
The acquisition would nudge Plastic Omnium to above 8 billion euros ($8.81 billion) in sales, placing it among the 25 largest automotive suppliers worldwide. Its greater reach will also enhance its ability to support larger contracts that are resulting from the globalization of vehicle platforms.
Plastic Omnium also manufactures fuel tanks, painted body panels and plastic structural parts.
Faurecia says the sale, combined with the redemption of a convertible bond, will almost eliminate the company’s net debt, better positioning the supplier to invest in its remaining sectors.
In addition to its automotive seating and emissions control technologies businesses, Faurecia wants to strengthen its interiors systems division, as company executives reiterated in recent comments to Plastics News, an affiliate of Automotive News Europe.
Faurecia also has big plans for its composites business, which develops parts including an all-composite liftgate and an exposed-carbon fiber roof, as well as interior and seating components. Company leaders are confident composites will be “very useful” in the long term, CFO Michel Favre said in a conference call Monday. As automakers continue to look for ways to remove weight from vehicles to help meet emissions standards, Faurecia expects the demand for composite products grow, especially 2020 and later, he said.
The sale is expected to close in 2016, pending approval from antitrust authorities and consultation with employee representative groups, the companies announced.
Plastic Omnium ranks No. 40 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $6.5 billion in 2014.