US’ Lear Offers USD89.3 Million to Buy Out Chinese Partner of Auto Parts JV
Tang Shihua
DATE:  Jul 07 2020
/ SOURCE:  Yicai
US’ Lear Offers USD89.3 Million to Buy Out Chinese Partner of Auto Parts JV US’ Lear Offers USD89.3 Million to Buy Out Chinese Partner of Auto Parts JV

(Yicai Global) July 7 -- Leading US car seating and e-systems supplier Lear Corporation has offered to pay CNY626 million (USD89.3 million) for its Chinese partner’s share in an auto joint venture in a deal that would make it sole proprietor.

Lear holds 55 percent equity in Shanghai Lear STEC Automotive Parts, which was set up in 2003, and Huayu Automotive Systems holds the rest. Based on a strategic assessment of the JV’s prospects, the Michigan-based firm is now proposing to buy out Huayu’s share to wholly own the JV, Shanghai-based Huayu said yesterday.

The JV, which mostly produces automotive wiring harnesses, reported an unaudited operating revenue of CNY71 million (USD10.1 million) in the first quarter and revenue of CNY1.5 billion (USD213.8 million) in 2019, the auto parts maker said.

It counts SAIC Motor, one of China’s ‘big four’ state-owned automakers, JVs SAIC Volkswagen Automotive and SAIC General Motors as well as other Shanghai-based car makers among its clients. It also exports products overseas, including to North America.

The deal is expected to bring Huayu, which is controlled by SAIC Motor, around CNY400 million.

Huayu's stock [SHA:600741] was trading up 2.23 percent at CNY24.28 (USD3.46) this afternoon.

Editor: Kim Taylor

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Keywords:   Assets Transaction,Joint Venture,Wholly Owned Assets,Auto Harness,Lear Corporation,SAIC Motor,Huayu Automotive Systems