Chinese supplier Yanfeng Automotive Trim Systems Co. inked a deal to purchase U.S. auto seat maker Adient’s 30 percent stake in their interiors joint venture.
The $379 million deal will allow Yanfeng to turn the joint venture into a wholly owned subsidiary while unprofitable Adient receives much-needed cash.The two companies also agreed to extend the terms of their 50-50 seat partnership through the end of 2038, Yanfeng said on Sunday.
In addition, the seat joint venture, as part of global expansion plans, will spend $20 million to purchase Adient’s intellectual property rights for mechanical business patents such as tracks, recliners, locks and adjusters.
The transactions are expected to be completed this year.
Adient said it will use proceeds from the transactions to reduce debt and meet general corporate expenses.
The bulk of Yanfeng Automotive Trim systems operations in North America were once part of Johnson Controls Inc., before JCI got out of the auto interiors business. Adient is made up of the former JCI automotive seating business.
In the quarter ended Dec. 31, Adient’s adjusted earnings before interest, taxes, depreciation and amortization rose to $297 million from $176 million, but its net loss widened to $167 million from $17 million, according to the company’s filings on the New York Stock Exchange.