French automotive supplier Faurecia has signed an agreement to acquire the controlling share of lighting manufacturer Hella as part of a deal which is valued in total at €6.7bn.
As part of the transaction, Faurecia will acquire the 60 percent stake held by Hella pool shareholders. In addition, Faurecia has announced a voluntary public tender offer to acquire the remaining Hella shares at an offer price of €60 per share.
The pool shareholders of Hella will retain an up to nine percent stake in the listed parent company via a reverse shareholding
When the deal is complete and the two firms have been combined, the company will be the seventh largest automotive supplier globally, according to its own estimate.
An article in the Financial Times explains that acquiring Hella will significantly reduce Faurecia’s exposure to the move away from petrol and diesel drivetrains, as a lot of its catalogue is hard parts for engines.
“It is only logical that we join forces to drive the future of mobility together. With Faurecia at our side, we will have even more opportunities to do so than before,” said Hella CEO Dr. Rolf Breidenbach in a press statement.
“Together, we will have the critical edge to benefit from the strategic drivers that are transforming the automotive industry,” added Patrick Koller, CEO of Faurecia.
While the deal is huge in financial terms, it is not entirely unexpected. Reports in the German trade press earlier in 2021 suggested Hella’s founding Hueck family were considering putting the for sale signs out, as OEM suppliers continue to consolidate.