French supplier Plastic Omnium won approval from EU regulators to acquire Faurecia's bumpers and front-end modules business on the condition that it sells seven Faurecia plants.
Faurecia says it is selling its exteriors business so that it can almost completely eliminate its debt, enabling the French company to accelerate investment in technologies for sustainable mobility and connectivity.
Plastic Omnium said the acquisition if strategic and following the takeover, its global market share in auto exterior systems will be 15 percent. The company will gain facilities in Germany where it currently does not have an auto exterior systems production presence. The transaction also reinforces its business in the U.S.
The European Commission imposed limits on the purchase because of concerns about competition. "Plastic Omnium offered to divest key production facilities to address our concerns," EC Commissioner Margrethe Vestager, in charge of competition policy, said in a statement. "This ensures that car manufacturers in Europe will continue to have a choice of suppliers for automotive parts such as bumpers at competitive prices after the takeover."
Faurecia, which is 47 percent owned by PSA Group, said that the composite materials part of its exteriors business was not included in the sale. The acquisition involves Faurecia's exterior business with an enterprise value of 665 million euros ($734 million).
Plastic Omnium will divest four plastic bumper plants in France and one in Spain as well as two front-end module plants and an r&d center in Germany.
Even with the divestments, Plastic Omnium will add 1.1 billion euros in sales to its bumper business, which is almost 75 percent of the scope in the originally planned deal.
"The deal will reinforce Plastic Omnium's position as the leading supplier worldwide of car exterior components,” a company spokesman told Automotive News Europe.
Plastics News and Reuters contributed to this report