Korea's Halla to buy Visteon's auto climate businesses in China, India
(Bloomberg) -- Halla Climate Control Corp. has decided to buy Visteon Corp.'s automotive climate units, almost four months after the U.S. auto-parts supplier announced the plan for combining the businesses to make them more competitive.
Halla Climate, the South Korea-based maker of car air-control systems that is partly owned by Visteon, will purchase climate businesses in countries including China, India, France, Netherlands, Mexico, and the U.S., for a total of at least 410 billion won ($387 million), according to 18 separate regulatory filings.
Visteon announced it plans to sell its climate business to Halla Climate for cash, creating a combined entity called Halla-Visteon Climate Group that will be "predator not prey" in the industry, Visteon CEO Tim Leuliette said in September. The deal, when completed, will boost Halla Climate's business outlook as the company would become the second biggest in the industry, according to Kim Yoon Ki, an analyst at Mirae Asset Securities Co.
"This is a good strategic move for Halla," Kim said by telephone. "The merger will create a synergy effect which will lead to cost reduction, and lure new customers."
"Approval of the agreement by Visteon's board of directors and entry into the final agreement are expected soon," Visteon said in a statement on its Web site. The auto parts maker, which will continue to own 70 percent of the company created by the deal, said the transaction is on track to be completed in the first quarter of 2013.
Customers have wanted the businesses of Visteon and Halla Climate put together for more than a decade, and the transaction won't be subject to a shareholder vote, Leuliette said at an investor conference in Boston in September.
Leuliette was confirmed CEO on Oct. 1 after serving as interim chief following the departure of Don Stebbins Aug. 10. He was part of a bloc of Visteon directors who favored revamping the company, which wasn't able to generate consistent profits for a decade under three CEOs before Leuliette.
Visteon failed in July to buy the remaining 30 percent of Halla Climate after South Korea's National Pension Service, which owns 8.1 percent, rejected its bid. The U.S. company, spun off from Ford Motor Co. in 2000, has tried to shed lower-margin units to focus on faster-growing Asian operations.
Halla Climate's latest announcement clouds Halla Group Chairman Chung Mong Won's ambitions to rebuild the group, which sold units after going bankrupt in 1997. Mando Corp., the group's biggest unit, said in August it may offer to buy Visteon's 70 percent stake in Halla Climate.
"For Mando, this means its target has become bigger and pricier," said Mirae's Kim.Contact Automotive News