Samvardhana Motherson Automotive Systems Group BV (SMRPBV), through its Vision systems division, has entered into an agreement with Ichikoh Industries (a subsidiary of Valeo SE) in Japan to buy 100 percent of its mirror business at an enterprise value of 5.2 billion yen. The proposed deal is expected to be closed in six to eight months subject to certain conditions.
“The transaction includes Ichikoh’s mirror business (development and manufacturing of automotive mirrors and associated products) in Japan and China, catering largely to Japanese original equipment makers (OEMs). The target business reported revenues of 15.8 billion yen in 2021. With this transaction Motherson will add three manufacturing facilities across Japan and China and 260 patents to its intellectual property portfolio,” SMRPBV said in a filing on September 26.
In July 2022, Motherson established two facilities in Hamamatsu, Japan and this acquisition is the next major step in line with the Group strategy of 3CX10, it said in the filing. It has realigned its diversification strategy to 3CX10 meaning that exposure to any country, component or customer should not be more than 10 percent of its total turnover by 2025.
Completion of this transaction will provide Motherson with strong local R&D and manufacturing footprint, further strengthening the group’s relationship with Japanese OEMs. The improved customer connect with Japanese OEMs is expected to be a key catalyst for growth across the global footprint of these customers.
“Inorganic growth is an integral part of our Vision 2025. With this acquisition, Motherson will acquire design and manufacturing footprint in Japan enabling closer coordination and stronger relationship with Japanese customers both for their local as well as global business. This will also help Visions Systems to expand its geographical reach in China and in its ability to grow business with Japanese OEMs. Being an EPS accretive transaction, we are confident that we will be able to create value for our customers and shareholders by this acquisition,” said Vivek Chaand Sehgal, chairman, Motherson.
This will be the third acquisition under the Vision systems business division during the current five-year plan following acquisitions in Turkey and China. With this transaction, Vision systems will achieve majority of its strategic geographical expansion objectives that were highlighted as a part of the Group’s 2025 five-year plan. The increased share of Japanese OEMs which were previously under-represented in the Vision system portfolio will create additional growth opportunities for the division in the future.
"Ichikoh is a pioneer of the automotive mirror business in Japan with its long history and close relationship with Japanese OEM customers. I am convinced that with Motherson Group's advanced technologies and global presence, Ichikoh mirror business will be in a stronger position to continue meeting its customers’ expectations and realizing further growth. At the same time, Ichikoh will focus on its expertise in lighting, which is currently undergoing a profound revolution," said Christophe Vilatte, president and CEO, Ichikoh Industries.
At 9:45am, the shares of Samvardhana Motherson were trading at Rs 116.35 apiece on the BSE, down 1.52 percent, while the benchmark Sensex was down 833.95 points or 1.44 percent at 57,264.97.
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