Visteon on Tuesday (13 August) said it would sell its half share of Chinese joint venture Yanfeng Visteon Automotive Trim Systems to partner Huayu Automotive Systems (HASCO), along with direct interests in other related interiors joint ventures.
The pair will also modify existing electronics ventures in China to give Visteon majority control of Yanfeng Visteon Automotive Electronics (YFVE).
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The deals together are worth about US$1.5bn with Visteon receiving $1.2bn for the non-electronics operations. Its stake in YFVE will be valued at around $300m.
Completion is expected 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 president and CEO Timothy Leuliette.
“Selling the non-controlled YFV interiors business will generate significant cash that will allow us to return approximately $1.2bn in value to our shareholders through our share repurchase programme from November 2012 through December 2015.
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By GlobalData“Furthermore, these transactions will strengthen our global electronics position by consolidating the majority of YFVE and its high-growth customer order book,” Leuliette added. “We have enjoyed a strong relationship with HASCO through our YFV joint venture, and are pleased to continue this relationship in strategic core products within the fast-growing vehicle cockpit electronics market.”
Visteon will receive cash of about $1.25bn for the sale of its interests in YFV and other related interiors joint ventures and will pay around $70m to take control of the majority of YFVE.
Visteon’s board has bosted the remaining share repurchase programme by $875m to $1bn over the next two years. Including repurchases since November 2012, this would increase completed share repurchases to $1.175bn.
Visteon is concentrating on its core growth businesses – Halla Visteon Climate Control, which it owns 70%, and Visteon Electronics – both of which the supplier said are achieving higher than segment growth.
The YFV joint venture had 2012 revenue of approximately $7.2bn and was established in 1994 between Ford and Shanghai Automotive Industrial Company (SAIC).
Ford transferred the equity to Visteon in 2000 when Visteon became independent of the automaker. SAIC transferred the equity to HASCO as part of a public listing in 2009. YFVE was formed in 1994 as a joint venture of Ford and Shanghai Auto Instrumentation and integrated into YFV in 2002.
