Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
News
February 01, 2022 02:27 AM

Faurecia closes $6B acquisition of Hella to boost EV, self-driving business

Faurecia has acquired a controlling stake in Hella, seeking to increase its presence in electrification and self-driving technology.

Peter Sigal
Automotive News
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Faurecia logo_1.jpg

    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.

    Evolving business models

    The deal comes as automotive suppliers position themselves to take advantage of industry mega-trends such as electrification, connectivity and autonomous driving, by spinning off or selling "noncore" assets.

    Hella’s family shareholders said last year, in seeking a buyer, that the company had reached a size that required external competence beyond the founding family.

    Other notable supplier acquisitions in recent years include ZF Friedrichshafen's purchase of Wabco for more than $7 billion in 2019 and Qualcomm's acquisition of Veoneer for $4.5 billion, announced last October. 

    M&A activity peaked in the auto industry in 2021, with a record $123.5 billion in deals in the first three quarters alone, according to the law firm of White & Case. However, the majority of that was linked to reverse SPAC mergers, White & Case said.

    Trading in Faurecia had been suspended Monday pending completion of the deal. Hella’s results will be consolidated into Faurecia’s starting on Tuesday.

    Faurecia, based in Nanterre, France, ranks No. 8 on the Automotive News list of top 100 global suppliers, with worldwide sales to automakers of $17.59 billion in 2020. 

    Hella, based in Lippstadt, Germany, ranks 41st, with automotive sales of $5.47 billion. It is best known for lighting products, but also makes sensors, converters and power steering components.

    Faurecia said that the combination of the two companies would create the seventh-largest automotive supplier. However, based on Automotive News’ calculations of 2020 revenues, Hyundai Mobis, with $25.1 billion in sales in 2020, would remain in seventh position.

    Hella traces its roots to 1889. The Hueck family has controlled Hella since 1923 and took the company public in 2014. It sold its front-camera software business to Volkswagen Group in February 2021. 

    Faurecia began life in 1997 as the product of a friendly takeover of seating specialist Bertrand Faure by Peugeot SA’s equipment arm, ECIA. 

    PSA Group divested its holdings in Faurecia as part of the agreement with Fiat Chrysler Automobiles that created Stellantis in January 2021.  

    At the time, Koller suggested that Faurecia was looking for M&A targets to help reinforce its business as a standalone company. "The upcoming change in Faurecia's shareholding structure will offer new opportunities for value creation," he told analysts in February 2021.

    Those opportunities included the possibility of additional M&A activity, Koller said.  Faurecia had committed 60 percent of its net cash flow to deleveraging and potential "bolt on" activity, meaning acquisitions or collaborations. 

    RECOMMENDED FOR YOU
    Numbers That Matter Live — sign up for the next live
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    ExxonMobil weighing options for more chemical recycling capacity
    2
    Wilbert Plastic Services adjusts to changes with new owner, leadership
    3
    PepsiCo on a ‘multiyear journey' toward bioplastics
    4
    After years of challenges, can secondary sortation take off?
    5
    Biden sets US goal to replace 90% of plastics with biomaterials
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified