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Visteon Sells Stake in Chinese Auto Interiors Venture
Visteon Corp. has agreed to sell its 50% stake in its Shanghai-based interior joint venture, Yanfeng Visteon Automotive Trim Systems Co., to partner Huayu Automotive Systems Co. for $1.25 billion in cash.
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Visteon Corp. has agreed to sell its 50% stake in its Shanghai-based interior joint venture, Yanfeng Visteon Automotive Trim Systems Co., to partner Huayu Automotive Systems Co. for $1.25 billion in cash.
Separately, Visteon will pay $70 million for majority control of its fast-growing auto electronics joint venture with Huayu, which is named Yanfeng Visteon Automotive Electronics Co. Huayu is 60% owned by carmaker SAIC Motor Corp.
The partners expect to close the initial phase of the transactions by year end, with the rest of the sale occurring in stages through mid-2015.
Divesting Visteon's interiors business is a key element of the restructuring plan that new CEO Tim Leuliette unveiled last September. Under that program, the company has reorganized its auto climate-controls unit and is expanding its auto electronics operations.
The deal with Huayu does not include Visteon's wholly owned interiors business. The U.S. company's earlier pact to sell that unit to the Yanfeng Visteon trim venture collapsed in July 2012 because of uncertainty about the European auto market. Visteon says it still intends to divest those assets.
The company plans to use most of the proceeds from the sale of its stake in the Chinese trim venture to repurchase stock through the end of 2015. Visteon's board has increased its ongoing share buyback program by $875 million to a total of $1.2 billion from November 2012 through December 2015.
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