Lear Corporation has today announced it has reached a definitive agreement with WL Ross & Co. LLC ("WL Ross") and Franklin Mutual Advisers, LLC ("Franklin") to transfer substantially all of the assets of its North American Interior business and US$25m of cash to a newly-formed joint venture, International Automotive Components Group North America, LLC ("IAC North America").

Lear will hold a 25% equity interest in IAC North America and warrants for an additional 7% equity interest in IAC North America.

This transaction completes a series of strategic initiatives intended to improve the company's ongoing operating results, strengthen its balance sheet and increase operating flexibility.

"We are very pleased to have reached a definitive agreement to transfer our North American Interior business to IAC North America. This transaction combined with our recent financing initiatives have significantly strengthened the company's financial and competitive position," said Bob Rossiter, Lear's chairman and chief executive officer.

"Our focus going forward is to concentrate on delivering superior quality and service to our customers and to invest in further strengthening and growing our core businesses to increase value for our shareholders."

Under the terms of the agreement with respect to the company's North American Interior business, WL Ross and Franklin would make aggregate cash contributions of US$75 million to IAC North America, in exchange for the remaining equity, and extend a $50 million term loan.

Lear's North American Interior business has annual sales of approximately US$2.5bn.

In October, Lear announced that it had completed the contribution of substantially all of its European Interior business to International Automotive Components Group, LLC ("IAC Europe"), another joint venture with WL Ross and Franklin, in exchange for a one-third equity interest in IAC Europe.

IAC Europe also owns the European Interior business formerly held by Collins & Aikman Corporation.

See also: US: Lear completes transfer of European interiors business