US auto parts supplier Visteon sells Chinese JV stake to partner for $1.2 bln

14 Aug 2013


US auto parts supplier Visteon Corp yesterday agreed to sell its 50\-per cent stake in Chinese joint venture Yanfeng Visteon Automotive Trim Systems Co Ltd (YFV) and its direct interest in certain YFV affiliates to its partner Huayu Automotive Systems Co Ltd (HASCO), for about $1.2 billion.

Timothy LeulietteVisteon and HASCO agreed to modify their existing electronics ventures in China, whereby Visteon will obtain control of the majority of Yanfeng Visteon Automotive Electronics Co., Ltd. (YFVE).

All the transactions are valued at approximately $1.5 billion, with Visteon receiving $1.2 billion for the portfolio of non-electronics operations. Visteon's stake in YFVE will be valued at approximately $300 million.

The transactions, which are subject to government and regulatory approvals, are expected to be completed in multiple stages and completed by June 2015.

Michigan-based Visteon said that it expects to receive 90 per cent of the proceeds at or near initial closing.

Visteon will receive $1.25 billion for the sale of its interests in YFV and other related interiors joint ventures, and will pay approximately $70 million to gain control of the majority of YFVE.

Approximately $1.1 billion of the cash proceeds will be received at or around completion of the initial transactions, which is expected to occur before 31 December, subject to required approvals. The vast majority of the remainder of the cash proceeds will be received by June 2015.

"These transactions support our focus on our core climate and electronics businesses and will bring significant benefits to Visteon, our customers and our shareholders," said Timothy Leuliette, president and CEO of Visteon.

"Furthermore, these transactions will strengthen our global electronics position by consolidating the majority of YFVE and its high-growth customer order book," Leuliette added.

YFV was established in 1994 between Ford and Shanghai Automotive Industrial Company (SAIC). Ford transferred its stake to Visteon in 2000 when Visteon became an independent company. SAIC transferred its interest to HASCO as part of a public listing in 2009.

The YFV joint venture had 2012 revenue of approximately $7.2 billion.

YFVE was formed in 1994 as a joint venture of Ford and Shanghai Auto Instrumentation Co., and integrated into YFV in 2002.

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