Valeo is considering the divestment of its passive hydraulic actuator business to meet European Commission market competition concerns over its planned acquisition of FTE Automotive.
Valeo is considering the divestment of its passive hydraulic actuator business with a view to obtain the approval of the FTE acquisition by the European Commission.
Accordingly, Valeo says it has sought the best possible option for its employees and clients in order to find a suitable acquirer for this business activity.
FTE automotive, headquartered in Germany, is a leading producer of clutch and gear actuators.
Against this background, Valeo says it has initiated discussions with the Italian car-part supplier, Raicam, specialised in clutch and braking systems for both the original equipment market and the replacement market. These discussions have led to a solid acquisition project, which is subject to prior consultation with works councils, and which requires approval by European Commission within the framework of its review of the FTE project.
In 2016, Valeo’s passive hydraulic actuator business generated a EUR76m (US$86.9m) turnover. It currently employs slightly over 400 employees in three industrial sites located in Mondovi, Italy for the main site, Gemlik, Turkey and Nanjing, China. The plan to establish a footprint in India, which has been under preparation for some time, should be implemented by Raicam in the North West of India.
The acquisition of FTE remains subject to the prior formal approval of the European Commission.
If Valeo obtains clearance of the FTE transaction, the contemplated divestment could be finalised in the last quarter of 2017, it says.