Standard Motor Products, the automotive replacement parts manufacturer and distributor, announced it had formed a joint venture with Foshan Guangdong Automotive Air Conditioning, a China-based manufacturer of air conditioning compressors for the automotive aftermarket and the Chinese original equipment market.
Standard Motor Products will spend about US$12.5m on the 50/50 joint venture. The new company is named Foshan FGD SMP Automotive Compressor.
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Eric Sills, Standard's CEO and president, said: "FGD has been an excellent supplier to us of air conditioning compressors for several years. Additionally, they have begun making inroads with Chinese vehicle manufacturers.
"We believe that this transaction will enhance our position as a basic low cost manufacturer and a leading supplier of temperature control parts to the aftermarket, as well as provide SMP with growth opportunities in the rapidly expanding China market. We welcome FGD into the Standard family.
"We believe the transaction will be accretive to earnings in year one, excluding one-time integration costs."
