In a week that features two important automotive industry trade fairs – the New York Auto Show (which included the launch of the Cadillac CT6, the controversial Lincoln Continental Concept and the all-new Jaguar XF and Porsche Boxster Spyder) and the Mid-America Trucking Show (Daimler’s SuperTruck and Paccar’s self-parking Peterbilt prototype truck) – it was a series of automotive supplier acquisitions that really caught the attention.
The top global tyre manufacturers have remained relatively unchanged for the last three decades, and there’s long been speculation about how and when this might change. Movement in the tyre sector has been eagerly awaited, and Pirelli has been the subject of speculation since ChemChina’s Ren Jianxin first approached the Italian supplier three years ago.
In a week featuring the New York Auto Show and the Mid-America Trucking Show, it was a series of automotive supplier acquisitions that really caught the attention
In March 2015, the Chinese state-owned chemicals group began its proposed €7.3bn (US$7.85bn) takeover of the 143 year old Italian tyre manufacturer. The process involves ChemChina first acquiring Pirelli’s majority shareholder, CamFin, which controls a 26.2% stake in Pirelli, before buying the tyre manufacturer outright. It’s being presented as a ‘marriage’ rather than a hostile takeover, and indeed Ren – who hopes to complete the purchase before any possible counterbid comes in – appears keen to emphasise that Pirelli should continue to flourish and maintain its premium brand position.
Another major acquisition this week was made by GO Scale Capital, an investment fund with Chinese backing, which has secured 80.1% of Philips’ LED and car lighting business. Philips, which declared in September 2014 that it planned to divest the unit, retains 19.9%, but received US$2.8bn from GO Scale Capital for the majority stake in its 124 year old lighting business. Automotive sales account for around 20% of the unit’s overall sales.
Amongst the all-new new models and mid-cycle refreshes at the New York Auto Show, one of the most surprising news items came from Harman, which announced its acquisition of Bang & Olufsen Automotive for €145m (US$156m). Harman has made a series of high profile, strategic acquisitions in recent months, including almost US$1bn in a mix of cash and stock spent on buying Redbend and Symphony Teleca in January, as well as AMX in 2014 (US$365m) and iOnRoad Technologies in 2013. Bang & Olufsen’s ten year old Automotive portfolio includes car audio contracts with Audi, Aston Martin, BMW and Mercedes-Benz.
At the New York Auto Show, one of the most surprising news items came from Harman, which announced its acquisition of Bang & Olufsen Automotive
2015 was billed as a year of supplier base M&A activity and it’s so far proven to be an interesting time for those watching the supply base. Most recently, Bloomberg has reported that Burgos, Spain headquartered Grupo Antolin is in talks with Magna over a possible acquisition of some or all of its US$3bn interiors business.
Further M&A activity is anticipated in the supplier base as companies hone their businesses to focus on core interests, or to buy in the competencies they so desperately need to maintain pace with automotive technology developments.
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Martin Kahl is Editor, Automotive World
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