French Auto Firm Buys Troy Emissions Supplier

The French automotive technology company Faurecia Monday announced that it will acquire Troy-based Emcon Technologies, an integrator of emissions control technologies for passenger and commercial vehicles.

With the completion of this acquisition, Emcon Technologies will join Faurecia’s Exhaust Systems to form Faurecia Emissions Control Technologies, creating a new world leader in automotive emissions control. Additionally, this deal marks Faurecia’s entrance into the commercial and off-road vehicles market.

The development of clean vehicles requires the control and drastic reduction of emissions, a reduction in fuel consumption and lighter vehicles. The new technologies developed by the automotive industry as an answer to these objectives will reinforce the technology and product content, systems and processes, leading to a strong market growth. Through its acquisition of Emcon, Faurecia said it is positioning itself to contribute significantly to this market.

Emcon Technologies, formerly known as Arvin Industries, posted 2008 sales of 2.4 billion Euros ($4.7 billion) and employs 6,000 people in 19 countries.

The post-deal sales of Faurecia Emissions Control Technologies will be 5.2 billion Euros.

“This deal is in line with our company strategy introduced in February 2009," said Faurecia chairman and CEO Yann Delabrière. "It reinforces our leading position on the market for emissions control technologies, which will boast strong growth over the coming years. Moreover, this deal will take place with no significant increase of Faurecia’s debt.”

Added Emcon CEO Lee Gardner: "The entry of Emcon Technologies into Faurecia, a world-scale group recognized by all automakers, is a success for our teams and an important step in our development. It takes place at a crucial moment as the emissions control market requires strong technology developments and enjoys strong growth worldwide.”

The acquisition of 100 percent of Emcon Technologies’ shares will be paid exclusively by the issue of 20.9 million new Faurecia shares, with no cash impact and no significant impact on the group’s debt. Faurecia’s objective is for this deal to be accretive on the net income per share from fiscal 2011.

Following the deal, PSA Peugeot Citroën will remain Faurecia’s majority shareholder and hold 57.4 percent of the capital.

One Equity Partners, an investment fund of JPMorgan Chase & Co., and current shareholder of Emcon Technologies, will hold a 19 percent stake and be represented with two seats at its board as well as one seat on the board’s strategic committee.

The completion of the deal is subject to obtaining approval of anti-trust authorities, mainly in the United States and Europe, and to the vote of Faurecia shareholders at an Extraordinary General Meeting called on to decide on the contribution at the end of January 2010.