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Yanfeng to buy Adient’s stake in auto interior company

Yanfeng to buy Adient’s stake in auto interior company

Irish automotive seating company Adient has entered into a definitive agreement with China’s Yanfeng Automotive Trim Systems Co., to sell its 30% ownership stake in Yanfeng Global Automotive Interior Systems (YFAI) for US$379 million. The joint venture was set up in 2015.

Upon the completion of the transaction, Yanfeng will own 100% stake in YFAI that provides for companies such as Daimler AG, BMW, General Motors, and Volkswagen.

Adient and Yanfeng have also agreed to extend the term of their Yanfeng Adient Seating Co. (YFAS) joint venture to 31 December, 2038. The extension demonstrates Adient’s continued commitment to the partnership and the region.

In addition, Adient has agreed to sell certain patents and other intellectual property exclusively used in its seating mechanisms business to Adient Yanfeng Seating Mechanisms (AYM) for US$20 million, and AYM will license such intellectual property back to Adient. Going forward, Adient and AYM have also agreed to license to each other certain other intellectual property related to the seating mechanisms business.

Further, Adient and Yanfeng have agreed to amend the AYM joint venture agreement to update AYM’s business scope to allow AYM to carry out its seating mechanisms business both in and outside of China for both Chinese and non-Chinese customers.  Adient intends to leverage AYM’s expanded presence in the global seating mechanisms market as it continues to right-size its own metals business. The amended AYM joint venture agreement also will reflect certain governance changes such that Yanfeng will have consolidation rights of AYM’s financial results. 

Adient will continue to hold a 50% ownership interest in AYM.

The agreed transactions are cross-conditioned on each other and closing is subject to regulatory approvals and other customary closing conditions. Adient expects the transactions to be completed within its 2020 fiscal year.

“We value our strong relationship with Yanfeng. These pending transactions expand that valuable strategic partnership while allowing Adient to continue to focus on our core business, further positioning us for long-term success,” said Doug Del Grosso, Adient’s President/CEO.

Proceeds from the transactions are expected to be used by Adient to pre-pay a portion of the company’s debt and for general corporate purposes.

Adient is a global leader in automotive seating. With 83,000 employees in 35 countries, Adient operates 220 manufacturing/assembly plants worldwide. 

Yanfeng, a wholly-owned subsidiary of SH-listed automotive component maker Huayu Automotive System Co. Ltd (Hasco), has over 240 branches and 68,000 employees across the world. The company focuses on providing solutions across diverse categories in the automotive sector with respect to interiors, exteriors, seating, electronics, and passive safety.


(IMA)


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