In the North American vehicle lighting market, one player's desire to cash out was the ticket for another player to join in.
Federal-Mogul Corp. put its interior lighting business up for sale in 2012 after concluding the technology was no longer part of its core strategy. But despite the competition for lighting business and electronics market share globally, the decision attracted no attention from potential buyers and the operations hung limp for five years.
Enter Rebo Lighting and Electronics — a Chinese company virtually unknown in the United States, but with considerable recognition in its home market. The supplier of interior LED lighting had $121 million in 2017 global sales revenue, mostly in China, and had become eager to enter North America.
Its parent company, Boao Industrial Co., purchased Federal-Mogul's lighting unit in December with the goal of using North America to build Rebo into a global interior lighting powerhouse. For an undisclosed purchase price, Boao, headquartered in Chongqing, China, acquired Federal-Mogul's manufacturing plant in Sparta, Tenn., and its technical center in Ann Arbor, Mich.
Yu Zhang, North American president of Rebo Lighting and Electronics, told Automotive News that investing in a U.S. presence was critical, even if the outlook wasn't promising for Federal-Mogul.
"The lighting business was noncore and small to Federal-Mogul, and they've wanted to sell for many years," Zhang said. "But for Rebo, this is our main business. Even if we are smaller, this gives us a global footprint."
The lighting segment is seeing other market moves. At the end of June, Magna International paid $271 million to acquire Olsa SpA, an Italian lighting maker. That deal will give Magna new plants in Italy, Poland, Brazil, China and Mexico.
In April, LG Electronics bought the Austrian lighting and headlight systems supplier ZKW Group in a deal worth $1.3 billion. That hookup is intended to take ZKW, primarily a premium-vehicle supplier, into a more diverse customer base.