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(Bloomberg) — Apollo Global Management Inc. agreed to buy Forvia SE’s auto interiors business for an enterprise value of €1.82 billion ($2.1 billion), helping the French supplier cut debt and streamline its business.
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The carve-out transaction, which is subject to closing conditions including regulatory approvals, is expected to be completed in the second half of this year, Apollo said Monday in a statement on its website. Bloomberg reported last week that the asset manager was close to a deal for the business.
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Forvia shares climbed as much as 4.2% in early trading in Paris. The stock is down about 23% this year.
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Formed in 2022 following the merger of Faurecia SE and Hella GmbH, Forvia is a supplier of automotive technologies such as systems for automated driving and energy management.
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The sale of the interiors unit, which makes parts including door panels and center consoles, is part of a strategy to streamline its profile and accelerate growth.
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The deal will help the supplier to Volkswagen AG, General Motors Co. and BMW AG cut net debt by at least €1 billion, and see the company focus on high value-added, technology-driven activities, it said in a statement.
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“We are in a better situation financially” thanks to this transaction, Forvia Chief Executive Officer Martin Fischer said on a call with reporters.
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The interiors unit,which represents approximately 18% of the group’s consolidated revenue, has 59 production sites and eight research and development centers across 19 countries with 31,000 employees. Six of those sites accounting for about 2,000 jobs are in France.
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Evercore Inc. and Credit Agricole SA acted as financial advisers to Forvia, while UBS Group AG and UniCredit SpA advised Apollo.
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“The automotive interiors industry is evolving rapidly as manufacturers increasingly differentiate their vehicles through cabin design, premium materials and new technologies,” said Michael Reiss, a private equity partner at Apollo.
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Separately, Forvia said its directors submitted the appointment of Pierre-André de Chalendar as an independent board member and may elect him chairman due to the planned resignation of incumbent Michel de Rosen at an AGM to be held on June 4.
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(Updates with details from statements, shares starting in second paragraph.)
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