Today, the company announced that it has signed a definitive agreement with Faurecia, a subsidiary of the FORVIA Group, to acquire two of Faurecia’s commercial vehicle manufacturing facilities and their associated activities for EUR142 million. The facilities are situated in Columbus, Indiana (United States) and Roermond, Netherlands.
Cary Chenanda, vice president of Cummins Emission Solutions, stated, “Cummins and Faurecia have a long history of partnership.” This proposed acquisition would enable both organizations to achieve their long-term strategic objectives, preserve business operations and employment for talented employees within the two facilities and associated tech centers, and create value for customers, suppliers, and the entire supply chain.
Cummins is committed to meeting or exceeding global emissions regulations now and in the years to come, and I am invigorated by this one-of-a-kind opportunity to acquire seasoned technical and manufacturing resources that will transport us far into the future.”
Chenanda continued, “I value Faurecia’s participation and attentiveness during the due diligence process, and I believe this prospective acquisition would be in the best interests of all parties. We are eager to develop relationships with new clients and vendors.
This agreement signifies a major milestone in our partnership with the Roermond and Columbus facilities, but it does not alter our relationship with other global locations. We will continue to work with Faurecia in Brazil, China, India, and South Africa.”
Strategic Justification
Cummins has relied on Faurecia as a partner and supplier for over a decade, and the FORVIA Group’s divestment initiatives provided Cummins with an opportunity to secure the long-term supply of aftertreatment components and assemblies. The acquisition augments Cummins’ existing mixer portfolio by adding significant technical and manufacturing resources. These assets position the Emission Solutions division of Cummins for long-term success.
Cummins is committed to honoring Faurecia’s existing supplier and customer contracts in both facilities and will make the necessary investments following the conclusion of the transaction to fulfill the contracts. Until the acquisition is finalized, Cummins and the Columbus South and Roermond facilities will continue to operate independently as separate entities.
Cummins plans to finance the transaction with cash from the balance sheet.
The transaction is expected to close by the end of the calendar year, pending customary closing conditions, receipt of applicable regulatory approvals in the United States, Germany, and the Netherlands, and successful completion of the consultation process with the works council and trade unions in Roermond.
