Veoneer Inc., one of the world’s largest pure-play companies focused on Advanced Driving Assistance Systems and Automated Driving, has signed agreements to sell its 51% ownership in the Japanese (VNBJ) and Chinese (VNBZ) entities that comprise Veoneer Nissin Brake Systems (VNBS) to its joint venture partner Nissin-Kogyo Co., Ltd. and Honda Motor Co., Ltd.
Upon the completion of the transactions under the agreements, the VNBS joint venture will be terminated. This is the next step in the strategic review of Veoneer’s brake systems business first announced in early 2019. On June 17, 2019, Veoneer announced that it had signed a binding agreement to acquire Nissin Kogyo’s interests in the U.S. operations of VNBS. The transaction closed on June 28, 2019, after which Veoneer now owns 100% of the U.S. operations.
The termination of the VNBS joint venture and the divestiture of the Japanese and Chinese entities are part of Veoneer’s previously announced market adjustment initiatives which are aimed at focusing Veoneer on its core businesses and providing an effective cost structure to address the current market and business situation in the company.
The purchase price is approximately $176 million. In connection with the transactions, Veoneer will be repaid an outstanding loan of approximately $20 million and will receive a special dividend of approximately $5 million for a total cash impact of around $200 million. The divestiture is structured as two separate transactions, subject to the satisfaction or waiver of customary closing conditions, including approvals necessary under the Japanese (for VNBJ) and Chinese (for VNBZ) competition laws.