|Leoni takes over Valeo’s wiring systems business|
Wire, cable and wiring systems specialist Leoni is taking over the wiring systems business of the French automotive component supplier Valeo and will thus continue its successful growth story. The agreement on purchase of all the shares in Valeo Connective Systems was signed in Paris today. With this acquisition, the so far largest in the Company’s 90-year history, Leoni advances to become the new European market leader in wiring systems for the motor vehicle industry and thereby joins the top 5 wiring system suppliers worldwide. Leoni’s new shares of the wiring system markets are 24 percent in Europe and about 9 percent worldwide. The enterprise value is about EUR 255 million and includes assumptions of existing retirement benefits and specific liabilities as well as the net financial liabilities. Subject to competition authority approval, operations will come under Leoni’s control from 1 January 2008.
Valeo Connective Systems with its headquarters in Montigny-le-Bretonneux near Versailles develops and produces electrical and electronic supply systems for vehicles, including the associated power distribution components such as relay and fuse boxes. With about 11,700 employees at twelve production facilities as well as several research and development centres, Valeo Connective Systems generated EBITDA of EUR 36 million on sales of EUR 543 million in 2006. The wiring systems manufacturer’s customers include the French automotive groups Renault-Nissan and PSA as well as Fiat, Seat and well-known component suppliers.
“By acquiring the Valeo wiring systems business we are closing a strategic gap: It provides us with entry into the French automotive market and broadens our customer base to include major, high-growth carmakers,” said Uwe H. Lamann, member of Leoni’s Management Board in charge of the Wiring Systems division.
“The two companies complement each other almost one hundred percent in the market. Leoni will thus in the future have a customer base that is exceptionally balanced by international standards,” said Lamann. The customer base of Leoni’s Wiring Systems division comprises all the well-known, multinational car manufacturers, including BMW, Daimler, General Motors, Ford, Porsche and now also Renault-Nissan and PSA, as well as multinational commercial vehicle manufacturers.
Combined with the acquired Valeo division, Leoni’s wiring systems business will amount to sales of about EUR 1.6 billion in 2008 (2006: EUR 954.2 million). In terms of consolidated sales, Leoni projects EUR 3 billion for the same period (2006: EUR 2.1 billion).
“Leoni is pursuing the goal of strengthening its position in markets and regions where consistently profitable growth is possible. Alongside the European vehicle industry, Valeo Connective Systems also already has contacts in and initial orders from emerging markets such as Russia, India and China. Our Company is thereby strengthening its own activity in these regions and providing additional growth potential for Leoni’s Wiring Systems division,” said Dr Klaus Probst, CEO of Leoni AG.
“We are exceptionally well set up in the global marketplace thanks to our best-in-class technology, high power of innovation and cost leadership. Together with Valeo Connective Systems, Leoni will be even better able to benefit from trends in the sector and take its wiring systems business forward with customers around the world,” said Lamann. The proportion of electronics in vehicles, due among other things to additional functions in the areas of infotainment and vehicle safety, will continue to rise in the future. The mounting complexity of vehicle wiring will meanwhile drive the share of work performed by the supplier up further: from development and production through to quality assurance. Leoni is, with its takeover of Valeo Connective Systems, expanding its engineering capacity further and is, with its worldwide productivity system as well as first-rate quality management, ideally equipped to meet future challenges.