Faurecia, along with Valeo, is one of the two largest French automotive parts suppliers. Employing 122,000 people worldwide, Faurecia generated €17.5 billion in sales in 2018 for an operating margin of 7.3%, the largest in its history. In the light of its merger with FCA, Groupe PSA is to sell its 46% stake in Faurecia to its shareholders, with FCA also said to pay an exceptional dividend of €5.5 billion. Upon the announcement on October 31, Faurecia’s shares were down 6%, before declining another 2.3%.
According to some experts, mergers between OEMs are not favourable to equipment suppliers due to pressure on purchasing and prices; Groupe PSA’s shares were trading 6% lower, while that of FCA increased 10%. The real cost for the PSA shareholders will largely depend on the share price of Faurecia. “It’s a good deal, but it’s slightly more favourable to FCA shareholders, with PSA shareholders having to accept a higher market risk factor”, a specialist told French media L’Argus. With a solid financial structure and well outlined future directions, Faurecia is expected to continue with a strong growth cycle.
Faurecia focusses on three main businesses: Seating (43%), Interiors (31%), and Clean Mobility (26%), and has a varied customer portfolio; Volkswagen Group (19%), Ford (16%), PSA (14%), Renault-Nissan-Mitsubishi Alliance (13%), FCA (7%), GM (5%), BMW (5%), Daimler (5%), Chinese manufacturers (4%), and Hyundai-Kia and Jaguar Land Rover (2%).
Source: L’Argus/Le Figaro
