Faurecia to buy Hella in €6.7bn deal
French automotive supplier Faurecia has reached an agreement to buy German 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. The combined Group will focus on four growth areas in Hella that have 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 nearly double turnover of the Hella business units to €7bn by 2025 even in the face of the decline of the traditional ICE car market.
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The majority of Hella shares are held by a Family pool which will join Faurecia’s shareholders with up to 9 percent share of capital, subject to an 18-month lock-up. A Family representative will join Faurecia’s Board of Directors. The deal has been unanimously approved by Faurecia’s Board of Directors and received the support of Hella’s management.
“As family shareholders, we are fulfilling our corporate and entrepreneurial responsibility for Hella by turning the company Hella over to new owners early on, before our family pool agreement expires,” said Dr Jürgen Behrend, Chairman of the Family pool.
“This move will further improve the strategic positioning of the company – for the benefit of Hella and its 36,000 employees. At the same time, the family will continue to accompany the development of this leading European company as a shareholder in Faurecia,” he said. “With Faurecia as the new majority shareholder, Hella will be able to play to its strengths even more effectively. The competences of both companies complement each other perfectly. We have secured long-term commitments for HELLA’S locations and its investments in future business areas. Hella, thus, has the ideal prerequisites to continue to be successful in the long term.”
“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.”
Faurecia aims to accelerate the business strategy of Hella with a focus not only on automotive original equipment (Lighting and Electronics), but also on additional market segments (Aftermarket, Services and Special Applications).
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. The management and business CEOs of these three groups will be based in Lippstadt.
In ADAS & Autonomous Driving, the combination of Faurecia Clarion Electronics with Hella Electronics and Software will create a strong global player supporting the next high-speed and low-speed ADAS convergence. Radars, Electric Power Steering (including fail operational), e-mirrors, 360° views & automated parking solutions are a few examples of the combined product and system offer.
The deal will also open new sales opportunities for Hella through Faurecia’s access to key Chinese and Japanese OEMs.
www.faurecia.com; www.hella.com
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