(AOF) – Thirty minutes before the closing of the Paris Stock Exchange on Monday, Faurecia announced the completion of the acquisition of a majority stake in Hella. Faurecia thus acquired a total of approximately 79.5% of the shares of the German equipment manufacturer, including 60% of the shares of Hella from the pool of family shareholders, paid for approximately 52.1% in cash and for approximately 7.9 % in newly issued Faurecia shares; and 19.5% as part of the settlement of the public tender offer ended on November 11th.
The total value (cash and shares) of this acquisition represents an investment of 5.3 billion euros.
As a result, Hella’s family shareholder pool has become Faurecia’s largest shareholder with around 9% of the French equipment manufacturer’s shares.
The appointment of a representative of the family pool to the Board of Directors of Faurecia will be proposed to the next general meeting of shareholders.
The family pool has also agreed to be subject to an initial blocking of its Faurecia shares for a period of 18 months, then to a subsequent blocking of an additional 12 months for the part of its Faurecia shares exceeding 5% of the group’s capital.
“We will now work together and effectively in order to achieve the significant and confirmed synergies that have been identified and to create lasting value for all of our stakeholders”, declared Patrick Koller, Chief Executive Officer of Faurecia.
“The Group’s combined sales in 2025 should amount to 33 billion euros and represent an important lever”, added the leader.
This acquisition was financed by the use of €2.9 billion under the €5.5 billion bridge loan secured in August 2021, including a €500 million term loan (maturing August 2024), and Faurecia’s own cash, including the proceeds of pre-financing operations already carried out by Faurecia (€1.2 billion of senior bonds linked to sustainable development criteria maturing in 2027, announced on November 4 2021 and €700 million Schuldscheindarlehen linked to ESG criteria, announced on December 17, 2021).
As already announced in August 2021, Faurecia intends to refinance the bridge loan through a capital issue for a maximum amount of €800 million with a preferential subscription right for shareholders.
The family pool has undertaken to participate in this issue in proportion to its stake in Faurecia. It is reminded that Peugeot 1810 and Bpifrance, respectively shareholders with 3.1% and 2.2% of the capital of Faurecia, have already expressed their intention to participate in the issue, in proportion to their stake in Faurecia, subject to final terms for this issue. The balance of the bridge loan will be refinanced by bonds and/or additional bank loans.
From February 1, 2022, Hella’s results will be consolidated in the accounts of the Faurecia Group.
The listing of Faurecia shares on Euronext Paris will resume on February 1, 2022.
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Automotive / Equipment manufacturers: A slow recovery
After a bad year 2020, some actors
expect a very gradual return to the level of activity prior to the crisis: not before 2024-2025.
The global pandemic weighed heavily on the accounts of Valeo, Faurecia and Plastic Omnium.
2020, a bad year for French equipment manufacturers.
All three ended 2020 posting losses, despite recovering in the second half. Faurecia recorded 379 million euros in losses last year. Its sales tumbled 35.4% in the first half, following the shutdown of automobile production in China, then in Europe and the United States. Its turnover fell by nearly 20%, to 14.6 billion euros, over the year as a whole and its operating margin rate fell from 7.2% to 2.8% .
Its competitor, Plastic Omnium, posted a decline in turnover of 16.7% in 2020, to 7.7 billion euros. Staff costs and general expenses were reduced by 240 million euros and investments by 27%. Including 250 million in asset impairments, its net loss reached 251 million in 2020.
Valeo suffered a drop in its turnover of 16%, to 16.4 billion euros, and a net loss slightly greater than one billion euros.
Hydrogen, a new El Dorado for equipment manufacturers
The production of green hydrogen is an alternative to electric batteries. Bosch, one of the world’s leading automotive suppliers, will invest by 2024 one billion euros in fuel cells, which transform hydrogen into electricity. The German group predicts that the green hydrogen market in Europe will represent nearly 40 billion euros by 2030, with annual growth rates of 65%. He estimates that the market for mobile fuel cell components, intended for vehicles, will represent around 18 billion euros by the end of the decade.
French automotive suppliers are also seeking to capture part of this market. Michelin and Faurecia rely on their subsidiary Symbio, which produces fuel cells. Plastic Omnium aims to become a world leader in hydrogen by 2030 and achieve 3 billion euros in sales by that date.