€6.7bn deal boosts European automotive electronics
French automotive supplier Faurecia has reached an agreement to buy automotive supplier Hella for €6.7bn.
A public tender cash offer for all Hella shares at €60.96 per share is expected to be resolved by the Hella annual general meeting on September 30, 2021. This is a premium of 33 percent on the current share price.
Hella had a 2020 turnover of €6.3bn, giving the combined group a turnover of €23.8bn, boosting Faurecia into seventh positionon the global rankings and the fifth largest European supplier.
Top ten automotive suppliers
- Robert Bosch $46.5bn
- Denso $41.1bn
- ZF Friedrichshafen $33.4bn
- Magna International $32.6bn
- Aisin $31.9bn
- Continental $29.6bn
- Faurecia + Hella $28.1bn
- Hyundai Mobis $25.1bn
- Lear $17.1bn
- Valeo $17.0bn
Source: eeNews Europe, company reports
The combined Group will focus on four growth areas with sales of €3.7bn and around 3,000 software engineers across 24 production sites and 21 R&D centres. This will see Faurecia as the fifth largest European supplier and in the top ten in America and Asia with a focus on electric mobility, including hydrogen solutions, ADAS & Autonomous Driving, the Cockpit of the Future and Lifecycle Value Management.
The company is aiming to increase the Hella business to €7bn by 2025 even in the face of the decline of the traditional ICE car market by opening up sales opportunities for Hella through Faurecia’s access to key Chinese and Japanese OEMs.
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The deal has been unanimously approved by Faurecia’s Board of Directors and received the support of Hella’s management.
“This combination is a unique opportunity to create a global leader in automotive technologies,” said Patrick Koller, CEO of Faurecia. “I am convinced that Faurecia and Hella have an outstanding fit as we share common vision, values and culture. Our two talented teams have been cooperating very efficiently since end 2018, they have demonstrated their combined capabilities. Together, we will have the critical edge to benefit from the strategic drivers that are transforming the automotive industry. By combining our product portfolios and market reach, we will accelerate profitable growth, through innovation, with more electronic and software content and enhanced execution quality. Our financial profile will remain solid, with strong attention paid to sustained cash generation and deleveraging the company. I am confident that this combination will create sustainable value for Faurecia’s and Hella’s customers, employees and shareholders.”
“Faurecia and Hella are a very good fit,” said Dr. Rolf Breidenbach, CEO of Hella. “This especially applies to product range and market coverage. In addition, both partners place a high value on consequent customer orientation, operative excellence and technology leadership. Therefore, it is only logical that we join forces to drive the future of mobility together.”
The Hella headquarters in Lippstadt will continue to play a major role and will be the Headquarter of three Business Groups of the combined Group: Electronics, Lighting and Lifecyle Value Management.
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