Plymouth, Mich.-based automotive seat maker Adient plc said June 24 it had reduced the price on a deal to sell its 30 percent ownership stake in a joint venture with Yanfeng Automotive Interior Systems Co. Ltd.
Under the altered deal, Yanfeng will acquire Adient's stake for $369 million, $10 million less than the original agreement announced in January. Yanfeng will control 100 percent of the interiors joint venture upon completion of the expected completion of the deal in the fourth quarter of this year. Of the total, $60 million will be paid on a deferred basis, Adient said in a press release.
The deal marks the end of Adient's years-long divestiture of its interiors business. In 2014, Johnson Controls Inc. spun off its entire $3 billion interiors business to the joint venture. JCI then spun off its automotive seating business, including the joint venture, to form Adient in 2016.
The operation covers injection molding and thermoforming and other plastics operations to make door panels, instrument panels, center consoles and other interior parts. Yanfeng is based in Shanghai and has 110 global locations with 33,000 employees.
Adient has spent the last two years cost-cutting its way back to profitability. Its recorded more than $3 billion in losses over the past two fiscal years, but the losses have been slowing in recent quarters.
Adient reported a net loss of $19 million on revenue of $3.5 billion its second fiscal quarter that ended March 31, compared with a net loss of $149 million on revenue of $4.2 billion during the same quarter in 2019.
Adient attributed $530 million of its $717 million decline in revenue during the quarter to the COVID-19 outbreak's impact on sales, primarily from lower vehicle production across Asia, where the coronavirus erupted earlier in the quarter than in the U.S., according to the financial report it filed with the U.S. Securities and Exchange Commission.
To improve its cash position, on March 31 Adient initiated a $600 million private offering, using its assets as collateral.
Also as part of the deal, Adient reupped its 50-50 joint venture with Yanfeng, Yanfeng Adient Seating Co. Ltd., through 2038. As part of that agreement, Adient is selling intellectual property and patents to a subsidiary of that venture.
Crain's Detroit Business Senior Reporter Dustin Walsh contributed to this report.