Cummins announces $153M plant acquisition from Faurecia
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Cummins Inc. plans to acquire two commercial vehicle-system manufacturing plants from France-based automotive supplier Faurecia for about $153 million, the companies announced Tuesday.
One of the plants is in Cummins’ headquarters city of Columbus, Indiana, and the other is in Roermond, Netherlands. Both plants are part of Faurecia’s clean-mobility division.
The acquisition is expected to close by the end of the year. Cummins said it will use cash on hand to purchase the two facilities.
Faurecia opened its 400,000-square foot digital manufacturing plant in Columbus in 2016 at a cost of $64 million. The plant makes emissions control products.
Faurecia, headquartered in suburban Paris, has been a partner and supplier to Cummins since 2010. The deal represents a strategic play for both companies.
Cummins, which launched more than a century ago as a maker of diesel engines and has about 73,600 employees worldwide, has been moving into electrification, hydrogen and other green power sources in recent years. This part of the company, which operates under the name Accelera, is growing but still represents a tiny fraction of Cummins’ overall business. Cummins’ 2022 revenues totaled $28.1 billion, with only 1% coming from the Accelera business segment.
Acquiring the Faurecia plants presents “an opportunity to ensure the long-term supply of after-treatment components and assemblies,” Cummins said in a news release.
“This proposed acquisition would enable both organizations to meet long-term strategic goals and would preserve business operations and employment for talented employees within the two plants and related tech centers, while creating value for customers and suppliers across the entire supply chain,” Cummins Vice President of Engine Solutions Cary Chenanda said in a written statement.
Faurecia CEO Patrick Koller said the asset sale “enables Faurecia to focus on its leadership positions in the market in ultra-low and zero-emission including hydrogen solutions.”
The deal will also help Faurecia’s parent company, Forvia Group, in its previously announced goal of divesting 1 billion euros in assets by the end of 2023, Faurecia said.
Faurecia and Germany-based manufacturer Hella are part of Forvia, the world’s seventh largest automotive supplier, with 2022 sales of 25.5 billion euros and more than 150,000 employees around the world.
Shares of Cummins were trading at $218.25 at midday Tuesday, up less than 1% from Monday’s closing price.