Bulletin: French Auto Supplier Faurecia's Plan To Acquire Clarion Removes Headroom At The Current 'BB+' Rating

PARIS (S&P Global Ratings) Oct. 26, 2018--S&P Global Ratings said today that French auto supplier Faurecia S.A. (BB+/Stable/--) has less headroom at the current rating level following the group's announcement of its intentions to acquire Japanese electronics company Clarion Co. Ltd. Faurecia has entered into an agreement with majority shareholder Hitachi to buy Clarion for an enterprise value of around €1.2 billion. Faurecia will finance the acquisition fully with debt, and the transaction is expected to close during the first quarter of 2019, subject to regulatory approvals. Clarion is a manufacturer of audio systems, in-vehicle infotainment, as well as connectivity, safety, and driver assistance systems. It mostly serves carmakers in Japan, China, and North America, and reported sales of about

...PARIS (S&P Global Ratings) Oct. 26, 2018--S&P Global Ratings said today that French auto supplier Faurecia S.A. (##+/Stable/--) has less headroom at the current rating level following the group's announcement of its intentions to acquire Japanese electronics company Clarion Co. Ltd. Faurecia has entered into an agreement with majority shareholder Hitachi to buy Clarion for an enterprise value of around 1.2 billion. Faurecia will finance the acquisition fully with debt, and the transaction is expected to close during the first quarter of 2019, subject to regulatory approvals. Clarion is a manufacturer of audio systems, in-vehicle infotainment, as well as connectivity, safety, and driver assistance systems. It mostly serves carmakers in Japan, China, and North America, and reported sales of about 1.4 billion (about 8% of Faurecia's 2017 revenues) for the 12 months ended March 2018. While Clarion's operating margin is currently lower than Faurecia's--due to the legacy of traditional audio...

Bulletin