In a move that it is claimed will create one of the world’s three largest suppliers of vehicle cockpit electronics, Visteon has agreed to purchase the automotive electronics business of Johnson Controls.
The transaction, valued at USD265m is subject to regulatory approvals and is expected to be completed in the second quarter of 2014.
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Visteon says the acquisition will enhance Visteon’s competitive position in the fast-growing vehicle cockpit electronics segment by strengthening its global scale, manufacturing and engineering footprint, product portfolio and customer penetration. The combined business will be a US$3bn global electronics enterprise with a claimed No. 2 global position in driver information and above-average growth rates for the segment, supplying nine of the world’s 10 largest vehicle manufacturers.
Visteon President and CEO Timothy D. Leuliette said the transaction reinforces Visteon’s commitment to cockpit electronics as one of Visteon’s two core businesses, along with Halla Visteon Climate Control, the world’s No. 2 automotive climate control supplier.
“We look forward to continuing on our path of value creation for customers and shareholders by integrating this highly regarded business into the Visteon Electronics family,” Leuliette said. “This is a strong strategic fit with our existing electronics portfolio and gives us the worldwide scale and cost efficiencies needed to support vehicle manufacturers’ global platforms and programs. It also diversifies our electronics customer base, solidifies our already strong global footprint, and brings new technologies, capabilities and outstanding engineers to help grow our business.”
The business to be acquired from Johnson Controls provides automakers with driver information, infotainment, connectivity and body electronics products. The transaction involves about 4,800 employees, including about 1,000 engineers, electronics specialists and designers at seven research and development centers in Europe, North America and Asia. The business has a diversified customer base, with BMW, Honda, Renault-Nissan, PSA Peugeot-Citroen and Ford representing about 72 percent of its annual revenue.
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By GlobalDataBy leveraging the combined strengths of the businesses, Leuliette said, Visteon will create a new global electronics market leader, capable of growing profitably as an enterprise that is “ideally positioned at the intersection of consumer electronics and the connected automobile of today and tomorrow.”
Martin Thall, president, Visteon Electronics, said the transaction will allow Visteon to better serve vehicle manufacturers through its expanded global scale and customer base, and accelerate growth and market expansion objectives.
“The combined business will result in market and technology leadership in major cockpit electronics technologies, as well as opportunity for entry and fast growth into new product lines,” Thall said. “The size and scale of our integrated research, development, and engineering will solidify Visteon as the ‘go to’ global innovation partner for automakers who require rapid development cycles and fast time-to-market.
“Visteon and Johnson Controls are committed to maintaining complete business continuity and providing excellent customer service while completing this transaction and driving a successful integration,” Thall added.
