MILANO – Faurecia highlighted on the Paris Stock Exchange: the automotive components group has announced an agreement to buy the German group Hella, specialized in electrical and electronic components, to create a component center with 2021 pro forma revenues estimated at 23 billion euros with an EBITDA margin of over 7%.
The shareholding of Faurecia, following the distribution of shares to Stellantis shareholders (following the merger between Peugeot and Fiat Chrysler), sees Exor (the holding company which Gedi, publisher of The Republic) as the first shareholder with 5.5% followed by the Peugeot family with 3.2% and the French government, through Bpi with 2.4%.
The structure of the transaction envisages that Faurecia will acquire 60% of Hella from the family that controls the German group for 3.4 billion euros and a consideration in shares (equal to 13.57 million of new shares). In this way, the current controlling shareholders of Hella will hold a total of 9% of the new entity. Subsequently Faurecia will launch a takeover bid on the market at 60 euros per share to take over the remaining 40%. The agreement thus values Hella 6.7 billion euros.
According to what has been announced, Faurecia will finance the operation through credit lines and available cash for 5.5 billion euros, which will be accompanied by an increase in capital of 800 million. The family that controls Hella will join the increase and also Peugeot 1810 and Bpi have undertaken to subscribe pro quota the shares. The press release does not call into question Exor which, as Equita sim hypothesizes, could therefore dilute around 4.5%.
The estimated synergies in terms of costs and optimization are higher than 200 million ebitda (gross operating margin) while the impact on revenues should be between 300 and 400 million by 2025 with an optimization of cash flows of approximately 200 million per year on average between 2022 and 2025.
According to UBS from an industrial point of view, the combination allows Faurecia above all to reduce its exposure in terms of sales to products related to motor vehicles to less than 10% and, thanks to the limited overlap with Hella, to introduce different lines of new business.