Valeo and Zexel: Strategic Alliance in Automotive Thermal Systems
28 October 1999
Valeo and Zexel: Strategic Alliance in Automotive Thermal Systems
PARIS, Oct. 28 -- Valeo and Zexel Corporation, with the
backing of Bosch, its majority shareholder, announced today the signature of a
Memorandum of Understanding in the domain of climate control and engine
cooling.
Regarding climate control, the memorandum provides for the establishment
of a joint venture between Valeo and Zexel, combining their respective Asian
activities in climate control systems and Zexel's worldwide compressor
business. The joint-venture would operate fourteen plants located in Japan,
the USA, Thailand, South Korea and China and employ 4,500 people.
Zexel would own a majority interest in the joint-venture with Valeo
retaining the option to increase its equity stake to 50%. 1999 pro-forma
estimated sales for the joint venture would total approximately
Euro 1 billion.
Under the proposed agreement Valeo would purchase the European and North
American activities of Zexel in climate control systems. The latter currently
operates two facilities in the USA and marketing and sales activities in
Europe. It employs 550 people. 1999 estimated sales of this activity total
Euro 240 million, bringing Valeo Climate Control sales in Europe and North and
South America to over Euro 1.4 billion.
Zexel would take a minority shareholding in Valeo Climatisation, the
company holding all Valeo's equity interests in climate control related
businesses.
The advantages of the projected agreement are manifold for Valeo
Climatisation, Zexel and the joint venture. A truly global activity would be
created and the combined business would be positioned as one of the
three leaders worldwide in climate control systems and compressors. Current
combined sales would total Euro 2.4 billion with strong growth potential.
As for engine cooling, the above joint venture and Valeo are planning a
second joint venture in Asia with Valeo taking a majority shareholding. Valeo
is already a world leader in this field, with a presence in Europe, North and
South America. The joint venture would provide an opportunity with Zexel to
expand in Asia. Through the comprehensive integration of engine cooling and
climate control thermal systems, the strategic alliance between Valeo and
Zexel will enhance the new partners' ability to meet the expectations of their
customers on a global scale and so grow profitably.
The agreements are expected to be completed at the beginning of 2000.
Valeo is an independent industrial Group fully focused on the design,
manufacture and sale of components systems and modules for cars and trucks.
Present in the original equipment and aftermarket segments, Valeo is among the
world top 10 automotive suppliers with estimated 1999 sales of approximately
Euro 7.7 billion. The Group employs 50,400 people worldwide and has
113 production facilities, 29 Research and Development centers and
10 distribution centers in 20 countries.
Zexel, with sales of Yen 230 billion and approximately 10,000 employees,
is a major Japanese automotive supplier specializing in fuel injection and
air-conditioning systems. Zexel is majority owned by Robert Bosch GmbH,
Stuttgart, which is one of the world's largest automotive suppliers, with
sales of DM 50 billion and approximately 190,000 employees.
For more information contact: Simon Gillham of Valeo, V.P. Corp.
Communications, +33-1-40-55-20-65