12 July 2016, 08:37
The European Commission has just authorized Plastic Omnium’s acquisition of Faurecia's Exterior Systems business, subject to a certain number of disposal commitments. These commitments represent approximately €700 million in revenue, half of which are composed of disposal of the French sites and a Spanish site for the bumper business, and half made up of the front-end module assembly business in Germany.
A major acquisition by its geographical footprint and customer portfolio
Plastic Omnium's resulting increased revenue of €1.2 billion demonstrates the strategic and industrial relevance of the transaction. It includes €1.1 billion in revenue in the bumper business (i.e. almost 75% of the initial scope), €800 million of this in Germany, where Plastic Omnium did not have an auto exterior systems production presence. Almost half of this revenue comes from new clients, and 40% from premium clients.
An accretive acquisition with a strong potential for improvement
This acquisition is immediately accretive, producing an annual operating margin of €50 million, and will generate an additional amount of €70 million from synergies by 2019.
Confirmed status as the world leader
With this transaction, Plastic Omnium confirms its position as world leader in auto exterior systems, with its global market share reaching 15%. It creates industrial coverage with 5 new plants in Germany, which is now the country that is the largest contributor to revenue for the Auto Exterior division and for the group. With three additional plants, it doubles the presence of the Auto Exterior division in Spain. It reinforces business as well in the east of Slovakia, in Belgium and in America. This acquisition creates new links to clients such as Audi, Mercedes and Ford, and strengthens ties in particular with Volkswagen, Seat and PSA, as well as with BMW and Fiat Chrysler Automobiles (FCA).
Strengthened capacity for innovation
Lastly, it increases the size of Plastic Omnium Auto Exterior by 50%, and adds an R&D center with 300 employees in Germany to the 1,300 engineers around the world that are already developing systems for this division that are lighter, more aerodynamic and more integrated. This increases the capacity for innovation and growth to meet the challenges to come from advances in technology.
The transaction will close on July 29, 2016 for the entire scope, for an agreed enterprise value of €665 million. As part of the disposals to be carried out, Plastic Omnium will work to preserve the future of these sites, their employees and their clients, while at the same time meeting the requirements of the European Commission. On July 29, 2016, Plastic Omnium will welcome the 5,500 employees of the acquired business and will integrate its 15 plants more quickly than originally planned.
The interim financial statements for 2016, published on July 27, 2016, will show a new increase in business and results.