Adient is to sell its 30% stake in Yanfeng Global Automotive Interior Systems (YFAI) to Yanfeng for US$379m.
Equally, Adient and Yanfeng will extend the term of Yanfeng Adient Seating’s (YFAS) joint venture agreement to December, 2038
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Adient will sell certain mechanisms business patents and other intellectual property to Adient Yanfeng Seating Mechanisms (AYM).
In addition, Adient will sell certain patents and other intellectual property exclusively used in its seating mechanisms business to AYM for US$20m and AYM will licence such intellectual property back to Adient.
Adient and AYM have also agreed to licence to each other certain other intellectual property related to the seating mechanisms business.
Further, Adient and Yanfeng have agreed to amend the AYM joint venture agreement to update AYM’s business scope to allow AYM to carry out its seating mechanisms business both in and outside China for both PRC and non-PRC customers.
Adient intends to leverage AYM’s expanded presence in the global seating mechanisms market as it continues to right-size its own metals business.
The amended AYM joint venture agreement also will reflect certain governance changes such that Yanfeng will have consolidation rights of AYM’s financial results. Adient will continue to hold a 50% ownership interest in AYM.
The agreed transactions are cross-conditioned on each other and closing is subject to regulatory approvals and other customary closing conditions. Adient expects the transactions to be completed within its 2020 fiscal year.
“We value our strong relationship with Yanfeng,” said Adient president and CEO, Doug Del Grosso.
“These pending transactions expand that valuable strategic partnership while allowing Adient to continue to focus on our core business, further positioning us for long-term success.”
Proceeds from the transactions are expected to be used by Adient to pre-pay a portion of the company’s debt and for general corporate purposes.
