India-headquartered Samvardhana Motherson Automotive Systems Group (SMRPBV), through its vision systems division has entered into an agreement with Ichikoh Industries (a subsidiary of Valeo SE) in Japan to buy 100% stake of its mirror business at an enterprise value of 5.2 billion yen (Rs 286 crore).
The transaction includes Ichikoh’s mirror business (development and manufacturing of automotive mirrors and associated products) in Japan and China, catering largely to Japanese OEMs. The target business reported revenues of 15.8 billion yen (Rs 869 crore) in 2021.
With this transaction, Motherson says it will add three manufacturing facilities across Japan and China and 260 patents to its IP portfolio.
The company says the acquisition marks a major milestone in the group’s relationship with Japan which began in 1983 with its first collaboration. The Japanese market remains a key target market for the Motherson Group.
In July 2022, the Tier 1 supplier established two facilities in Hamamatsu, Japan and this acquisition is the next major step in line with the Group strategy of 3CX10 with increased geographic and customer diversification. Completion of this transaction will provide Motherson with strong local R&D and manufacturing footprint, further strengthening group’s relationship with Japanese OEMs.
The improved customer connect with Japanese OEMs is expected to be a key catalyst for growth across the global footprint of these customers.
Motherson says this will be the third acquisition for its Vision systems business division during the current 5-year plan following acquisitions in Turkey and China. With this transaction, vision systems will achieve majority of its strategic geographical expansion objectives that were highlighted as a part of the of the Group’s 2025 five-year plan. The increased share of Japanese OEMs which were previously under-represented in the vision system portfolio will create additional growth opportunities for the division in the future.
The proposed deal is expected to be closed in 6-8 months subject to completion of all conditions precedent.
Vivek Chaand Sehgal, Chairman, Motherson said, “Inorganic growth is an integral part of our Vision 2025. With this acquisition, Motherson will acquire design and manufacturing footprint in Japan enabling closer coordination and stronger relationship with Japanese customers both for their local as well as global business.”
“This will also help Visions Systems to expand its geographical reach in China and in its ability to grow business with Japanese OEMs. Being an EPS accretive transaction, we are confident that we will be able to create value for our customers and shareholders by this acquisition”
Christophe Vilatte, President and CEO, Ichikoh Industries said, “Ichikoh is a pioneer of the automotive mirror business in Japan with its long history and close relationship with Japanese OEM customers. I am convinced that with Motherson Group’s advanced technologies and global presence, Ichikoh mirror business will be in a stronger position to continue meeting its customers’ expectations and realising further growth. At the same time, Ichikoh will focus on its expertise in lighting, which is currently undergoing a profound revolution.”