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Faurecia starts Parrot Automotive partnership talks

By Simon Warburton | 7 December 2016

Faurecia has started exclusive negotiations for a partnership with Parrot Automotive, a supplier of infotainment and connectivity solutions for the car industry.

Completion of the project could result in Faurecia progressively taking control of Parrot Automotive, with the first step an initial 20% participation through a reserved capital increase based on an enterprise value of EUR100m (US$107m) for 100% of the connectivity company.

At the same time Faurecia would subscribe to a convertible bond issued by Parrot, which would allow Faurecia to increase its shareholding to 50.01% from 2019. By 2022, Faurecia would also be in a position to own all the shares in Parrot Automotive.

"This investment in Parrot Automotive would give us a solid base in electronic applications and infotainment for connected vehicles," said Faurecia CEO, Patrick Koller. "Combined with our interiors and HMI expertise, this partnership would enable us to offer a connected user experience with outstanding perceived quality."

Faurecia's vision of the cockpit of the future, which it unveiled at the Paris Motor Show earlier this year, is:

. Connected, through smart HMI and integrated electronics, which provide intuitive connectivity among people, vehicles and the outside world.

. Versatile, for various occupant scenarios, with a focus on safety, well-being and comfort. Depending on driving mode, occupants will be able to adjust their position in the cabin, while additional consoles and screens could become available.

. Predictive, for improved safety, comfort and convenience. The use of sensors and big data will allow the predictive cabin to develop the ability to anticipate, learn and adapt automatically to each occupant's needs and situation.

This project is subject to consultation with the employee representatives of Parrot Group.

It is expected to close in the first quarter 2017.

Data from just-auto's QUBE service shows Faurecia claiming the position of the world's sixth largest automotive equipment supplier, its business having been based on four business groups: Faurecia Automotive Seating (FAS), Faurecia Interior Systems (FIS), Faurecia Emissions Control Technologies (FECT) and Faurecia Automotive Exteriors (FAE).

These groups encompass a wide range of components, systems and modules ranging from exhausts, bumpers, instrument and door panels and complete seats and components.

However, this structure has now changed - in mid-December 2015, the company signed a Memorandum of Understanding to divest most of the FAE business, primarily consisting of bumpers and other plastic parts (72% of product revenue) and front-end modules (28%), to peer French supplier Plastic Omnium.

A final sale agreement was signed in mid-April 2016, and the closing of the deal was on 29 July 2016, having secured authorisation from the European Commission (EC).

The company's composites business, a Faurecia plant supplying smart in Hambach, France and equity-accounted joint ventures in Brazil (with Magneti Marelli) and China (with DongFeng) were excluded from the transaction.