VAN BUREN TOWNSHIP — Visteon Corporation today announced that it has entered into an agreement with Huayu Automotive Systems Co., Ltd. (HASCO) to sell its 50 percent stake in Chinese joint venture Yanfeng Visteon Automotive Trim Systems Co., Ltd. (YFV), as well as its direct interests in other related interiors joint ventures, to HASCO. Additionally, Visteon and HASCO agreed to modify their existing electronics ventures in China such that Visteon will obtain control of the majority of Yanfeng Visteon Automotive Electronics Co., Ltd. (YFVE).
The collective transactions are valued at approximately $1.5 billion, with Visteon receiving $1.2 billion for the portfolio of non-electronics operations. Visteon’s stake in YFVE will be valued at approximately $300 million. The transactions, which are subject to customary government and regulatory approvals, are expected to be completed in multiple stages and substantially completed by June 2015. Visteon expects to receive 90 percent of the proceeds at or near initial closing.
“These transactions support our focus on our core climate and electronics businesses and will bring significant benefits to Visteon, our customers and our shareholders,” said Timothy D. Leuliette, president and CEO of Visteon. “Selling the non-controlled YFV interiors business will generate significant cash that will allow us to return approximately $1.2 billion in value to our shareholders through our share repurchase program from November 2012 through December 2015.
“Furthermore, these transactions will strengthen our global electronics position by consolidating the majority of YFVE and its high-growth customer order book,” Leuliette said. “We have enjoyed a strong relationship with HASCO through our YFV joint venture, and are pleased to continue this relationship in strategic core products within the fast-growing vehicle cockpit electronics market.”
Visteon will receive cash payments of approximately $1.25 billion for the sale of its interests in YFV and other related interiors joint ventures, and will pay approximately $70 million to gain control of the majority of YFVE. Approximately $1.1 billion of the cash proceeds will be received at or around completion of the initial transactions, which is expected to occur before Dec. 31, 2013, subject to required approvals. The vast majority of the remainder of the cash proceeds will be received by June 2015.