PARIS - Valeo Chairman Noel Goutard is looking for a major acquisition in the USA.
In an interview with French weekly Journal des Finances, he openly named four US companies that fit his general plans, and he raised Valeo's goal for non-European business.
'Many diversified American groups, such as AlliedSignal, Rockwell, ITT or Cooper Industries, are currently focusing on their core business and are trying to divest a number of their automotive components divisions,' said Goutard. 'These assets are spread all over the world. For a buyer, it is a way to strengthen its position in Europe and in North America as well.'
Goutard's directness was very unusual. He is generally discreet with the press.
In 1997, of its global sales of FF34 billion ($5.6 billion), Valeo had FF9 billion outside Europe.
By 2000-02, Goutard said he wants FF50 billion sales for Valeo, half of it outside Europe. That suggests buying FF16 billion worth of non-European business.
'Our strategy obviously implies international growth,' said Goutard. 'The targets that we've defined equally mean one or several acquisitions. To strengthen our business in the USA remains a priority.'
Marc Gouget, auto analyst with BNP Equities (Banque Nationale de Paris) in Paris, said a big acquisition of around $1 billion 'will be perfectly consistent with Valeo's strategy. With $2 billion in equity, practically no debt and a stockmarket value around $7 billion, Valeo can easily do it.'
Valeo's equity reached FF12.2 billion ($2 billion) in December 1997, and its net debt is FF1.3 billion.
Aside from naming four potential targets, Goutard gave no details of his plans. For Gouget, as well as other investors, 'The question now is: what can be the target?'
'Rockwell, now Meritor, could be one,' said Gouget. 'But Valeo may choose a company more focused on electronics, cockpit technology, or another field, like suspension and chassis systems.'