Faurecia to buy Japan’s Clarion in $1.3 billion deal

October 25, 2018 11:38 CET
UPDATED: Oct. 26 9:34 CET – adds details

PARIS — Faurecia has agreed to buy Japanese car navigation system maker Clarion from Hitachi in a 141 billion yen ($1.3 billion) deal to strengthen its presence in new auto technologies.

The Clarion takeover is the latest in a flurry of deals among car components businesses, which are trying to keep up with a shift by carmakers into new technologies such as autonomous driving, connected cars and electric vehicles.

It also follows several divestitures by Hitachi, which has been shedding non-core operations in recent years to bolster profitability and focus on its main infrastructure business.

Faurecia, which is 46 percent owned by Peugeot maker PSA Group, said it would offer 2,500 yen per share for Clarion, representing a 10.5 percent premium to Clarion’s closing price of 2,263 yen on Oct. 25.

The offer represented a total purchase price of 141 billion yen, Faurecia added, marking a transaction multiple of 5.7 times March 2018 core earnings, including operational cost savings estimated at 90 million euros by 2022.

“The combined product and technology offer of Faurecia and Clarion and our complementary geographic presence and customer portfolios would create significant value for all stakeholders,” Faurecia CEO Patrick Koller said in a statement.

Faurecia said that its post-deal sales should reach more than 21 billion euros by 2020, accompanied by an increase in earnings per share (EPS).

The French company also plans to set up a new business division headquartered in Japan, named Faurecia Clarion Electronics Systems, which would employ almost 9,200 people and have revenue of more than 2 billion euros by 2022.

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