German autoparts maker Continental has entered into an agreement with The Carlyle Group to acquire US-based Veyance Technologies, which operates in operates rubber and plastics technology business, for EUR1.4bn.
Veyance Technologies, based in Fairlawn, Ohio, US, has 27 plants and a workforce of about 9,000. The company, which operates globally, reported sales of approximately EUR1.5bn in 2013.
Continental executive board chairman Elmar Degenhart said that the planned integration of Veyance into the ContiTech division will expand the company's position in rubber and plastics technologies on a worldwide basis.
"Furthermore this acquisition will enable Continental to come a step closer to its strategic goal of increasing further our proportion of sales to industrial customers and private end users," Degenhart added.
"ContiTech itself will achieve some 60% of its sales outside the automotive OE sector in future."
The transaction is subject to the approval of the responsible anti-trust authorities. It will be financed from cash and available credit lines.
Veyance will complement the ContiTech division in key markets including the US and South America where the company has limited presence. The plants in Mexico, Canada, China, Australia and South Africa will provide additional opportunities for ContiTech.
Continental executive board member and ContiTech division CEO Heinz-Gerhard Wente said that ContiTech's Conveyor Belt Group and Fluid Technology business units in particular will benefit from an enhanced global presence.
"The Power Transmission Group and Air Spring Systems also will achieve positive results from the merger," Wente added.
Image: Continental will integrate Veyance into their ContiTech division. Photo: Courtesy of Continental AG.
