Combining Faurecia and Hella to create a global leader in fast - Growing automotive technologies, fully aligned with industry megatrends
Faurecia to launch a public tender cash offer on Hella and acquire its 60% stake from the family pool
Creation of the #7 global automotive supplier, with a highly advanced technology
portfolio addressing all industry megatrends
Combination of two highly complementary companies, sharing the same focus on
innovation, operational excellence, customer satisfaction and ESG
Hella’s identity, businesses and employees will play a major role within the combined
Group, Lippstadt will be global headquarter for three out of six Business Groups
A major player in Electronics and Software with combined sales of €3.7bn and critical
size for all four other OEM activities with sales > €3bn each
A unique zero-emission offer combining Faurecia’s hydrogen leading technologies
with Hella’s electrification solutions
Strong accretion (earnings and cash-flow) and value creation for shareholders
Faurecia, one of the world’s leading automotive technology companies, announced today that it has reached an agreement with the Family pool and with Hella to:
- Launch a public tender cash offer for all Hella shares at a price of €60 per share; total consideration of €60.96 (incl. the dividend of €0.96 expected to be resolved by the Hella annual general meeting on September 30, 2021 and to be paid by Hella to all its shareholders pre-closing) corresponds to a premium of 33% vs. the latest unaffected1 share price of €45.8 and of 24% vs. the unaffected 3-month VWAP (volume weighted average price) of €49..
- Acquire from the Family pool its 60% stake at a price of €60 per share, paid through a mix of €3.4bn of cash and up to 13,571,428 newly issued Faurecia shares2 (based on a reference price of €42.063 for one Faurecia share).
- As a result, the Family pool will join Faurecia’s shareholders with up to 9% share of capital, subject to an 18-month lock-up. A Family representative will join Faurecia’s Board of Directors, underlining the Family’s strong commitment to the combined company. This combination marks an unprecedented step in Faurecia’s ambition to accelerate its strategic transformation, investing in fast-growing segments with leading positions. The transaction represents an estimated total enterprise value of €6.7bn for 100% of Hella. It has been unanimously approved by Faurecia’s Board of Directors and received the support of Hella’s management.
The combined Group will focus on four growth areas, fully aligned with automotive megatrends:
- Electric Mobility (incl. hydrogen solutions)
- ADAS & Autonomous Driving, • Cockpit of the Future
- Lifecycle Value Management.
It will become a major player in the Electronics and Software fields with sales of €3.7bn and c. 3,000 software engineers. It will reach critical mass and hold leading positions in all its activities. It will be the 7th largest global automotive supplier (in the top-5 in Europe and in the top-10 in Americas and Asia), with a significantly enhanced profile in terms of businesses and customer reach.
Patrick Koller, CEO of Faurecia, declared:
“This combination is a unique opportunity to create a global leader in automotive technologies. I am convinced that Faurecia and Hella have an outstanding fit as we share common vision, values and culture. Our two talented teams have been cooperating very efficiently since end 2018, they have demonstrated their combined capabilities. Together, we will have the critical edge to benefit from the strategic drivers that are transforming the automotive industry. By combining our product portfolios and market reach, we will accelerate profitable growth, through innovation, with more electronic and software content and enhanced execution quality. Our financial profile will remain solid, with strong attention paid to sustained cash generation and deleveraging the company. I am confident that this combination will create sustainable value for Faurecia’s and Hella’s customers, employees and shareholders.”
Dr. Jürgen Behrend, Chairman of the Family pool, declared: "As family shareholders, we are fulfilling our corporate and entrepreneurial responsibility for Hella by turning the company Hella over to new owners early on, before our family pool agreement expires. This move will further improve the strategic positioning of the company – for the benefit of Hella and its 36,000 employees. At the same time, the family will continue to accompany the development of this leading European company as a shareholder in Faurecia, With Faurecia as the new majority shareholder, Hella will be able to play to its strengths even more effectively. The competences of both companies complement each other perfectly. We have secured long-term commitments for HELLA’S locations and its investments in future business areas. Hella, thus, has the ideal prerequisites to continue to be successful in the long term." Dr. Rolf Breidenbach, CEO of Hella, declared: “Faurecia and HELLA are a very good fit. This especially applies to product range and market coverage. In addition, both partners place a high value on consequent customer orientation, operative excellence and technology leadership. Therefore, it is only logical that we join forces to drive the future of mobility together. With Faurecia at our side, we will have even more opportunities to do so than before.”
The debt financing of the transaction is fully secured through a bridge facility with tier-one banks. Faurecia’s current credit ratings are expected to be confirmed by all three agencies shortly.
The structure of the transaction4 will allow Faurecia to launch from day 1 the execution of a significant cost synergies and optimization plan to generate > €200m EBITDA run-rate, with an 80% P&L impact to be achieved in 2024. Revenue synergies are expected between €300m and €400m of sales by 2025, and cash-flow optimizations are expected around €200m per year on average from 2022 to 2025.
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