Faurecia becomes world leader by acquring EMCON

[Plex]

Faurecia becomes world leader in emissions control technologies with the acquisition of EMCON Technologies (USA)

Faurecia becomes world leader in emissions control technologies with the acquisition of EMCON Technologies (USA)

Faurecia has signed an agreement to acquire EMCON Technologies (originally Arvin Industries), an integrator of emissions control technologies for passenger and commercial vehicles. Based in Troy (Michigan, USA), EMCON Technologies posted 2008 sales of 2.4 billion euros and employs 6,000 people in 19 countries. Once the deal is completed, EMCON Technologies will immediately join Faurecia's Exhaust Systems to form Faurecia Emissions Control Technologies, the new world leader on this market.

A major strategic deal

With this acquisition, Faurecia Emissions Control Technologies:

becomes the world leader in emissions control technologies;
boasts a reinforced Research & Innovation potential in new technologies for emissions reduction;
enters the commercial and off-road vehicles market;
broadens its customer base and reinforces its geographical presence.

The post-deal sales of Faurecia Emissions Control Technologies will be 5.2 billion[1] euros.

Yann Delabrière, Chairman and CEO of Faurecia, said: "I am pleased to welcome EMCON technologies and its teams within Faurecia. This deal is in line with our company strategy introduced in February 2009. It reinforces our leading position on the market for emissions control technologies, which will boast strong growth over the coming years. Moreover, this deal will take place with no significant increase of Faurecia's debt."

For Lee Gardner, CEO of EMCON Technologies, "The entry of EMCON Technologies into Faurecia, a world-scale group recognized by all automakers, is a success for our teams and an important step in our development. It takes place at a crucial moment as the emissions control market requires strong technology developments and enjoys strong growth worldwide."

Emissions technology - a strong growth, high-tech market

The development of clean vehicles requires the control and drastic reduction of emissions, a reduction in fuel consumption and lighter vehicles. The new technologies developed by the automotive industry as an answer to these objectives will reinforce the technology and product content, systems and processes, leading to a strong market growth.

The total 2020 market is estimated at 65 billion euros versus 29 billion euros in 2008 for passenger vehicles, 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).

A deal paid in shares, accretive from 2011

The acquisition of 100% of EMCON Technologies' 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. It will generate annual synergies of around 60 millions euros, or 2.5% of 2008 combined sales (excluding monoliths). Faurecia's objective is for this deal to be accretive on the net income per share from fiscal 2011.

Following the deal, PSA Peugeot Citroën will remain Faurecia's reference shareholder and hold 57.4% of the capital.

Philippe Varin, Chairman of the Managing Board of PSA Peugeot Citroën, stresses: "We welcome this new and important step of the development of Faurecia which, thanks to its ongoing recovery, has been able to gain the confidence of its customers, its partners and its shareholders. Faurecia is now ideally placed in the leading pack of worldwide equipment suppliers. PSA Peugeot Citroën, as reference shareholder of Faurecia, will continue to support its development strategy."

One Equity Partners, an investment fund of JPMorgan Chase & Co., and current shareholder of EMCON Technologies, will hold a 19% stake and be represented with two seats at its Board of Directors as well as one seat on the Board's Strategic Committee.

Richard Cashin, Managing Partner of One Equity Partners (JPMorgan Chase & Co.), stated: "We are thrilled to be a part of this transaction which allows OEP to become shareholders of Faurecia, a world leading equipment supplier."

The completion of the deal is subject to obtaining approval of anti-trust authorities, mainly in the United States and Europe, and to the vote of Faurecia shareholders at an Extraordinary General Meeting called on to decide on the contribution at the end of January 2010. PSA Peugeot Citroën has committed to approve the resolutions up to vote at the General Meeting.

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Faurecia is one of the world's leading automotive equipment suppliers, specializing in four major activities: seats, vehicle interiors, front ends and emissions control technologies. In 2008, the Group posted sales of 12 billion euros. It has operations in 29 countries at 190 sites and 28 R&D centers. Faurecia is listed on the NYSE Euronext Paris stock exchange. For more information, visit: www.faurecia.com

EMCON Technologies is a leader in the global exhaust emission control technology industry. The company serves worldwide passenger car, commercial vehicle and engine manufacturers. This $3.2 billion business has operations in 19 countries with 6,000 employees and several long-term joint venture relationships. For more information, visit: www.emcontechnologies.com

Euronext

[Plex]

Faurecia Shareholders Approve EMCON Takeover

PARIS (Dow Jones)--French automotive supplier Faurecia SA (EO.FR) said Monday the company's shareholders have approved the terms of the previously announced takeover of EMCON Technolgies LLC of the U.S.

Under the EUR330 million takeover, announced last November, Faurecia is taking control of EMCON Technologies LLC and ET Dutch Cooperatie UA shares, parent companies of EMCON Group's operational arms, from One Equity Partners, a private equity fund of JP Morgan Chase & Co. (JPM).

The deal involves the creation of 20.9 million new Faurecia shares representing 19% of Faurecia's new total equity.

PSA Peugeot-Citroen (UG.FR) Chief Executive Philippe Varin has been appointed to Faurecia's board as has the parent company's finance director, Frederic Saint-Geours.

The shareholders' meeting also appointed two new directors: Lee Gardner, who will leave his position as chairman and CEO of EMCON Technologies to become Partner of One Equity Partners and Eric Bourdais de Charbonni??re, chairman of the supervisory board of Michelin.

Following the deal, Peugeot's shareholding in Faurecia is diluted to 57.4% from more than 70%. One Equity Partners has a 17.3% shareholding and the public float is 24.9%.

WSJ