|Valeo concluded an agreement with SNECMA with a view to
acquiring the automotive activities of the Labinal group. This transaction would take
place following SNECMA's acquisition of Sopartech, which holds the majority of voting
rights in Labinal.
Valeo would acquire all shares held by Labinal in Sylea, that is
52.9% of its capital, at a price of 54 euros per share, with dividend attached. Following
the acquisition, Valeo would implement a price guarantee procedure for Sylea's minority
shareholders ("garantie de cours"). Valeo would later acquire Labinal's
Filtrauto filters and Telma driveline retarders businesses. The operations would be
carried out in cash.
The acquired activities achieved 1999 sales of 1.4 billion euros and employ 16,000
people at 49 production sites. Sylea generates 44% of its sales in France, 53% in other
European countries and 3% outside of Europe.
Following this transaction, the Valeo Group's pro-forma 2000 consolidated sales should
exceed 10 billion euros, with electrical and electronics activities accounting for more
than 60% of the total. Since 1998, Valeo has successively acquired in this sector ITT
Electrical Systems in the U.S. and Germany, Mando Starters and Alternators in South Korea,
and a stake in Ichikoh in Japan.
The acquisition of Filtrauto will strengthen the Group's presence on the aftermarket,
while the Telma retarders business will benefit its truck activity.
Commenting on the transaction, NoŽl Goutard, Chairman & CEO of Valeo, stated:
"This is a strategic operation for Valeo's electrical and electronics activities. The
Group is consolidating its position as a systems supplier in this high-growth sector. The
transaction will have an immediate accretive impact on Valeo's net earnings per share. It
also leaves us room to maneuver in terms of other acquisitions."
The Board of Directors has approved the principle of this operation, which will be
submitted to the Valeo Central Works Council and to the European Commission.
These operations remain subject to the usual conditions for this kind of transaction,
which should be fulfilled by the end of June 2000.
(May 2, 2000)