French firm to buy Clarion in 141b yen deal

PARIS: French car-parts company Faurecia has agreed to buy Japan’s car navigation system maker Clarion from Hitachi in a 141 billion yen (RM5.26 billion) deal to strengthen its presence in new auto technologies.

The Clarion takeover is the latest in a flurry of deals among car components businesses, which are trying to keep up with a shift by carmakers into new technologies, such as autonomous driving, connected cars and electric vehicles.

It also follows several divestitures by Hitachi, which has been shedding non-core operations in recent years to bolster profitability and focus on its main infrastructure business.

Faurecia, which is 46 per cent owned by Peugeot maker PSA, said it would offer 2,500 yen per share for Clarion, representing a 10.5 per cent premium to Clarion’s closing price of 2,263 yen on Thursday.

The offer represented a total purchase price of 141 billion yen, Faurecia added, marking a transaction multiple of 5.7 times March 2018 core earnings, including operational cost savings estimated at €90 million (RM427 million) by 2022.