Thierry Morin says a favorable exchange rate has induced Valeo to expand into the United States.
"The supply industry in the U.S. is weaker, and the dollar is weak," said Valeo Chairman Thierry Morin at a press conference here July 22.
"Draw your own conclusions," he replied when asked whether that meant Valeo wanted to expand in the United States through acquisition.
Shares of many public U.S. suppliers are selling at depressed prices, including U.S.-based suppliers Delphi Corp. and Visteon Corp.
The dollar was trading at about $1.22 to the euro last week, compared with about 90 cents to the euro at the start of the decade.
The currency-value change means a euro-based company can buy a U.S. asset for much less now than five years ago.
Morin said any acquisition would serve to reinforce Valeo in its three business areas: driving assistance, powertrain efficiency and comfort features such as air conditioning.
"We shall bolster those domains," he said. "We won't add a new one."
The recent rise in Valeo's debt level is not a hindrance, Morin said.
He said the company could easily spend about $550 million on acquisitions.
Valeo's net debt rose to $153.41 billion by June 30, compared with $608.8 million on Jan. 1. As a share of shareholder equity - the net asset value of the company - the ratio has jumped to 73 percent from 26 percent.
Valeo's debt surge mostly reflects a $398 million acquisition of the engine electronics division of Johnson Controls Inc. and a 251 million share buyback.