VAN BUREN TOWNSHIP, Mich. – Visteon Corp. and its longtime Korean affiliate Halla Climate Control Corp. (HCC) have signed a definitive agreement to contribute most of Visteon’s automotive climate business to HCC for a purchase price of $410 million in cash, subject to certain adjustments.
The transaction, first announced in September 2012, is subject to regulatory reviews and other conditions, and is expected to be complete in the first quarter of 2013. HCC is expected to finance the transaction through a combination of cash on hand and moderate borrowing.
Visteon owns 70 percent of Korean-based HCC and will have the same ownership level in the combined business. The company, to be renamed Halla Visteon Climate Control Corp., will be the world’s second largest global supplier of automotive climate components and systems, Visteon says. The combined business will have facilities in 17 countries, including 32 manufacturing plants, five global technical centers and seven regional customer centers. The transaction will include Visteon’s equity interest in climate joint ventures in China, India and Japan.
"This agreement demonstrates our commitment to provide the best climate technological solutions to automakers globally and to further capitalize on our successful relationship with Halla, which has seen revenues quadruple over the past 20 years – including the last 13 under majority Visteon ownership," said Tim Leuliette, Visteon president and CEO. "The combined business will have a strong balance sheet, an above-industry average growth profile and a manufacturing and engineering footprint considered the lowest cost among climate suppliers. The consolidated Halla Visteon Climate Control will be exceptionally well-positioned to deliver value for customers and shareholders."
Visteon’s climate business had revenues of more than $4 billion in 2011. The operations that Visteon will consolidate into Halla span 12 countries across Europe, North America and Asia and encompass more than 5,000 manufacturing, engineering and administrative employees.
Core products of Halla Visteon Climate Control will include heating, ventilation and air conditioning (HVAC) components; compressors; fluid transport and powertrain cooling products. Its innovative climate capabilities will include heat pump systems and battery thermal management for electric and hybrid vehicles.
Throughout its majority ownership, Visteon has supported HCC’s approximately $1 billion investment to become a more competitive supplier globally, building on HCC’s strong reputation in Korea.
