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Faurecia To Buy Out SAS JV From Continental; Stock Dips

French automotive parts manufacturer Faurecia (FURCY.PK) announced Monday that it has signed a Memorandum of Understanding to acquire the remaining 50% of its SAS joint venture from Continental for 225 million euros excluding cash. The shares were lowing around 2 percent in Paris trading.

Prior to the signature of a definitive agreement, the project will be subject to information of employee representative bodies and to the appropriate regulatory approvals. The company expects to close the deal in early 2020.

The joint venture with Continental was established in 1996 and provides complex interior module assembly and logistics. The company employs 4,490 people in 19 facilities in Europe, North America and South America. Sales in 2019 are expected to reach around 700 million euros.

Faurecia expects the project to be immediately accretive in operating margin, net income and ROCE. The financial performance would be consolidated into the Interiors Business Group.

With the purchase, Faurecia plans to expand systems integration offer to cover all interior modules as well as Faurecia's new product lines such as displays, electronics, sensors and thermal management.

Patrick Koller, Faurecia CEO said, "Following the creation of the Faurecia Clarion Electronics Business Group, this project would enhance our cockpit systems expertise for the Cockpit of the Future. SAS has a strong growth potential and represents an excellent opportunity for Faurecia strategically and financially".

In Paris, Faurecia shares were trading at 43.20 euros, down 2.26 percent.

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