French automotive supplier Faurecia has signed a memorandum of understanding (MoU) to acquire the remaining 50% shareholding in SAS Automotive Systems, a joint venture formed with parts manufacturer Continental.
Established in 1996, the joint venture has become a key player in complex interior module assembly and logistics. The company employs 4,490 people in 19 facilities in Europe, North America and South America with sales expected to reach €700m (US$770m) in 2019.
This project would expand Faurecia’s systems integration offering to cover all interior modules as well as Faurecia’s new product lines such as displays, electronics, sensors and thermal management. The addition of SAS core competences in systems integration and complexity management would also strengthen Faurecia’s ‘just-in-time’ plant network.
This project would be immediately accretive to Faurecia in operating margin, net income and return on capital employed. The financial performance would be consolidated into the Interiors Business Group. Synergies could be obtained in manufacturing engineering, logistics and footprint optimization as well as in purchasing and SG&A. With an order book showing strong growth potential, sales should exceed €1bn (US$1.1bn) by 2024 – representing a CAGR of around 9%.
Patrick Koller, CEO at Faurecia, said, “Following the creation of the Faurecia Clarion Electronics Business Group, this project would enhance our cockpit systems expertise for the Cockpit of the Future. SAS has a strong growth potential and represents an excellent opportunity for Faurecia strategically and financially”.
Faurecia has proposed to acquire the 50% shareholding from Continental for €225m (US$248m). Prior to the signature of a definitive agreement, this project will be subject to information of employee representative bodies and to the appropriate regulatory approvals. Closing of the deal is expected in early 2020.