Plastic Omnium : Acquisition of all Outstanding Shares in Inergy Automotive Systems for ˆ270 Million
Following the signing of a letter of intent last June, Compagnie Plastic Omnium on 28 July signed a sale agreement to acquire Belgium-based Solvay’s 50% stake in Inergy Automotive Systems for ˆ270 million, thereby increasing Plastic Omnium’s share in the company to 100%. As of 30 June 2010, Inergy had net cash of ˆ14 million.
The world’s leading manufacturer of fuel systems, Inergy Automotive Systems supplies fuel tanks for nearly one vehicle out of five worldwide from its 24 production plants in Europe (12), Asia (6), North America (3), South America (2) and South Africa (1). The company has 4,000 employees.
Inergy Automotive Systems is expected to generate revenue of ˆ1.1 billion in 2010 with a first-half operating margin of around 8%, similar to that of Plastic Omnium’s automotive division.
Inergy’s business should enjoy rapid growth in the years ahead. The automobile market is expected to expand by nearly 50% by 2015, led by Asia and emerging markets in which Inergy currently operates (China, India and Brazil) and where it benefits from the replacement of metal fuel tanks by plastic ones. Moreover, Inergy, which allocates more than 5% of revenue to research and development, is on the cutting edge in developing automotive emission control solutions with its TSBM technology that reduces hydrocarbon evaporation in petrol engines and its SCR system for reducing nitrous oxide emissions in diesel engines.
The acquisition is in line with Plastic Omnium’s automotive strategy of maintaining control over its industrial operations, while also developing in fast-growing regions, expanding the customer portfolio and strengthening its leadership in reducing automobile emissions.
Plastic Omnium’s acquisition of all outstanding shares in Inergy Automotive Systems has been submitted to and approved by employee representatives as part of the consultation process. Subject to approval by competition authorities, the transaction is expected to be finalized in September-October 2010.
