Johnson Controls, Yanfeng team up to form largest auto interiors company
20 May 2014
In an announcement over the week end Johnson Controls Inc and Yanfeng Automotive Trim Systems Co Ltd, a wholly-owned subsidiary of Huayu Automotive Systems Co, Ltd (HASCO), the component manufacturing arm of Shanghai Automotive Industry Corporation (SAIC), said they had signed a definitive agreement to form a global automotive interiors joint venture.
The non-cash transaction with asset contributions by the two companies would create the largest automotive interiors company in the world with revenues of approximately $7.5 billion. Yanfeng would hold the majority 70 per cent share in the joint venture, while Johnson Controls would have a 30-per cent share.
Streetinsider.com quoted Alex Molinaroli, Johnson Controls chairman and chief executive officer as saying, joining its two interiors businesses was a natural extension of its already successful partnership with Yanfeng in automotive seating, which had flourished over the past 15 years.
He added, it created a strong combined company with a market leading position and a foundation for sustained global growth. He further added that this also aligned with Johnson Controls' corporate commitment to China, which was increasingly becoming a major centre for the global automotive industry.
The agreement created a strong combined company with a market leading position and a foundation for sustained global growth, he added.
The new company would be headquartered in Shanghai with global engineering, development and customer centres in the US, Europe, China, Japan and India.
The products offered would include instrument panels, cockpit systems, door panels and floor consoles. The transaction, which is subject to limited conditions would be expected to close in the first half of calendar year, 2015.
Certain facilities in Johnson Controls' existing networks, however would not be covered under the agreement.
Johnson Controls would continue to operate those from its network as part of Johnson Controls' Automotive Experience business.
Earlier this year, in January, JCI sold its automotive electronics business to Visteon for $265 million, saying with the it would be able to reinvest the money in core operations.