Johnson Controls (JCI) and Yanfeng Automotive Trim Systems, a wholly-owned subsidiary of Huayu Automotive Systems, the component group of Shanghai Automotive Industry Corporation (SAIC), say they have signed a definitive agreement to form a global automotive interiors joint venture.
The agreement is a non-cash transaction of asset contributions by the two parties that JCI says will create the largest automotive interiors company in the world with revenues of around US$7.5bn.
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Yanfeng will hold the majority 70% share in the joint venture and JCI will have a 30% share.
“Joining our two interiors businesses is a natural extension of our existing partnership with Yanfeng in automotive seating, which has flourished over the past 15 years,” said JCI chairman and CEO, Alex Molinaroli.
“It creates a strong combined company with a market leading position and a foundation for sustained global growth,”
“This also aligns with Johnson Controls’ corporate commitment to China, which is increasingly becoming a major centre for the global automotive industry.”
The new company will be headquartered in Shanghai with global engineering, development and customer centres in the US, Europe, China, Japan and India.
The product portfolio will include instrument panels, cockpit systems, door panels and floor consoles.
The transaction is subject to limited conditions and is expected to close in the first half of calendar year, 2015.
The agreement excludes certain facilities in Johnson Controls’ existing networks.
Johnson Controls will continue to operate those from its network as part of Johnson Controls’ Automotive Experience business.
In January this year, JCI sold its automotive electronics business to Visteon for US$265m, noting the deal would enable it to reinvest the money in core operations.
