One of the biggest mergers of recent years has taken place in the global automotive supply industry, which has been on the attack with the electric vehicle transformation pandemic and climate crisis. French automotive parts manufacturer Faurecia has agreed to acquire a majority stake in German automotive lighting group Hella. Hella announced on Saturday that Faurecia is acquiring a 60 percent stake in the family business Hella and has submitted an offer for the remaining 40 percent stake for 60 euros ($70.75) per share. This offer is 33 percent premium compared to the shares before the cutthroat bid race for Hella.
In the statement made yesterday by Faurecia, the offer for 100 percent of Hella brings the total value of the institution to approximately 6.7 billion euros (7.9 billion dollars). According to the acquisition and merger regulations in Germany, the acquisition of 60 percent of a company paves the way for making a purchase offer for the remaining shares. Patrick Koller, CEO of Faurecia, stressed that “with the merger, the new company will be in the ideal position to respond to the strategic developments that are transforming the industry”. The new company will focus on electric and hydrogen fueled vehicles, driver assistants and autonomous vehicles.
It has a sales target of 33 billion Euros in 2025
The pro forma sales of the 6.7 billion Euro post-acquisition company are expected to reach 23 billion Euros in 2021 and the company will be the seventh largest automotive supplier industry company in the world. According to Faurecia, the biggest deal in the European automotive supplier industry in the last three years is expected to be completed in early 2022.
Merger will increase both sales and cash flow
The new company's pro forma sales are expected to reach 33 billion euros by 2025. The new company's sales revenues are expected to increase by 300 to 400 million euros per year by 2025, while its cash flow optimization is expected to increase by an average of 200 million euros per year from 2022 to 2025. Hella's headquarters in the town of Lippstadt in western Germany will continue to be a major corporate center as part of Faurecia's commitments to the German headlight manufacturer, and Hella sees the agreement as one that also considers the interests of its employees.
Hella: We will follow the development with a seat in shareholders and management
Hella announced in its statement that the family shareholders who founded the company will receive 3.4 billion euros in cash and close to 600 million euros of Faurecia shares - the value of which will be calculated at a quarterly average of 42.06 euros. “The Hella family will continue to oversee the continuation of the development of this pioneering European company, both through shareholders and through a representative on the board,” the founding family said in a statement.
Bids before the deal competed fiercely.
In addition to Faurecia's offer, France-based automotive supplier Cie Plastic Omnium and German Mahle were also organizations that went to the company with offers, but Faurecia emerged as the winner of this bidding war and became the company that made the agreement. German brake manufacturer Knorr-Bremse also withdrew from the bidding race last month. It is stated that the offers of Cie Plastik and Mahle are $ 60 per share and are below Faurecia's offer. According to Reuters sources, before Faurecia, investment bank Rothschild helped Hella get different offers, and consulting firm Bain had discussions with the company on the deal.
Auto transformation creates 'super suppliers'
The 'green transformation', which the heavy economic consequences of the pandemic and climate crisis have accelerated in 2020 and 2021, has accelerated the transition to electric vehicles, which require large investments in the automotive sector. It was brought to the agenda by DÜNYA Newspaper in April 2021, that this transformation, which accelerated the pace of especially in the automotive export markets of Turkey, such as the European Union and England, with the incentives and supports of the governments, is expected to cause a serious consolidation on the supplier side in the next five years. In the "Automotive Suppliers Pulse Control Survey" conducted by the European Automotive Suppliers Association CLEPA and McKinsey every six months, 68 percent of the participants stated that there will be a consolidation in the industry in the next five years, and that "super suppliers" dominate 30 percent or more of the market in some critical components. predicted it would happen.
Part of Faurecia AB's hydrogen conversion
The most important driving force of this consolidation in suppliers is the green transformation in the European Union and all over the world. The EU has taken an offensive in this area to strengthen its competition, especially against China. Faurecia is also an important supplier to the EU's hydrogen vehicle projects. The joint venture Symbio, founded by Faurecia and tire manufacturer Michelin, currently supplies the hydrogen fueled vans of French Renault. Although hydrogen vehicles are viewed with suspicion in the industry, the new automotive giant Stellantis is one of the companies preparing to produce hydrogen fuel cell truck fleets. German Volkswagen has announced that it is shelving its hydrogen plans. On the other hand, Carlos Tavares, CEO of the giant, consisting of the merger of Fiat Chrysler and PSA, in a statement to the FT, used the expressions "most of the companies that push on hydrogen fueled vehicles are late for electric vehicles".
Comments
No comment yet.