Faurecia to buy EMCON
14 November 2009
Faurecia has signed an agreement to acquire EMCON Technologies, an integrator of emissions control technologies for passenger and commercial vehicles. Based in Troy, MI, USA, EMCON posted 2008 sales of 2.4 billion euros and employs 6,000 people in 19 countries.
The acquisition of EMCON shares will be paid exclusively by the issue of 20.9 million new Faurecia shares, with no cash impact and no significant impact on the group’s debt. Following the deal, PSA Peugeot Citroen will remain Faurecia’s “reference shareholder” and hold 57.4% of the capital.
One Equity Partners, an investment fund of JPMorgan Chase, and current shareholder of EMCON Technologies, will receive 19% stake in Faurecia and will be represented with two seats at its Board of Directors. EMCON, originally a part of ArvinMeritor, was formed after Arvin sold its Emission Technologies Group to One Equity Partners in 2007.
Once the deal is completed, EMCON Technologies will immediately join Faurecia’s Exhaust Systems to form Faurecia Emissions Control Technologies. With this acquisition, Faurecia will strengthen its position as emissions control technologies supplier and will enter the commercial and off-road vehicle market.
According to Faurecia estimates, the total 2020 market for passenger vehicles will reach 65 billion euros versus 29 billion euros in 2008, experiencing 7% growth per year. The total commercial vehicles market, also growing at 7% per year, is expected to reach 16 billion euros in 2020 (vs. 7 billion euros in 2008).
The completion of the deal is subject to obtaining approval of anti-trust authorities, mainly in the United States and Europe, and to a vote of Faurecia shareholders.
Faurecia has operations at 190 sites and 28 R&D centers in 29 countries. In 2008, the Faurecia Group posted sales of 12 billion euros.