Faurecia SA has completed its acquisition of a controlling stake in lighting supplier Hella in a 5.3 billion euro ($5.95 billion) deal that is one of the biggest in the European automotive supply chain deals in the past three years.
Faurecia will hold 79.5 percent of Hella, the Paris-based supplier said Jan. 31. The deal included 60 percent of Hella shares from a pool of family shareholders, and 19.5 percent from the settlement of a public takeover offer.
The pool of Hella family shareholders will hold the largest bloc of shares in the combined company, with a 9 percent stake, Faurecia said.
The Paris-based supplier won a bidding war in August for Hella, with other contenders including Mahle, Plastic Omnium and the German brake specialist Knorr-Bremse. At the time Faurecia said the transaction represented an estimated total enterprise value of 6.7 billion euros ($7.90 billion) for 100 percent of Hella.
Faurecia makes seating, interiors and cockpit components, and electronics under its Clarion subsidiary. Hella is a major maker of automotive lighting. Both companies are involved in front-end systems that incorporate electronics, lighting, sensors and other systems.
Faurecia North America, based in Auburn Hills, Mich., does more than $130 million worth of injection molding in the region, placing it at No. 69 in the most recent Plastics News ranking for the area.
The company said in August that the combined group would be better placed to sell electric mobility products and automated driving services to the industry.
Analysts say that Hella's business making power and battery electronics and radar sensors for advanced driver assistance systems should be a good fit with Faurecia's ambitions.
Faurecia CEO Patrick Koller said Jan. 31 in a statement that the newly enlarged combined company would seek to generate 33 billion euros in revenue by 2025.
That revenue forecast represents “a significant leverage,” he said, adding, “We will now work together effectively to immediately start implementing the significant and confirmed synergies that have been identified and create sustainable value for all our stakeholders.”
Faurecia had earlier estimated that synergies could reach 300 million to 400 million euros of sales by 2025, and cash-flow optimizations are expected around 200 million euros per year on average from 2022 to 2025.