Valeo is ready to buy Siemens from EV Parts Venture

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Valeo SA, a French auto parts maker, shows the clearest signs, but plans to acquire partner Siemens AG from an electric auto parts venture to counter the declining combustion engine business.

Siemens told Bloomberg News that Valeo’s next CEO, Christoph Perillat, was a bystander in Munich. Car show This month’s event. “It’s not clear if this will happen soon, in 2022, or in 2024.”

Valeo and Siemens worked with Valeo Siemens eAutomotive GmbH five years ago to manufacture e-motors, axles, and powertrain electronics. Starting next year, Siemens may exercise the option to sell all of its shares.

JVs will be at a crossroads when auto parts manufacturers are under constant pressure to keep up with the accelerating shift to battery-powered vehicles. EVs accounted for 17% of total European sales in the first half of the year, up from 11% last year.

The Erlangen-based unit in Germany, which received € 1.1 billion ($ 1.3 billion) in the first half of the year, remained unprofitable last year, although the business is expected to flourish.Valeo’s retired CEO Jack Aschenbroich makes money 2 1 billion euros in 2024.

Jean-Louis Sempe, an analyst at the brokerage firm Invest Securities SA, said: “It is expected to buy a venture, which will replace some of the obsolete companies.”

Stock prices of French companies have fallen by as much as 2%, the lowest since June last year.

This venture is competing with Vitesco Technologies Group AG and others. Continental AG’s former powertrain division, which made its trading debut on Thursday, said this month that it expects the deficit electrification unit to make a profit from 2024. EV components will be Vitesco’s main source of revenue by the end of the decade. Andreas Wolf said.

Valeo CEO Aschenbroich said in February that it was “reasonable” for Siemens to decide to putt on its role in the venture. He said Valeo needed to have a balance sheet ready to take over the business until Siemens’ intentions became clear.

Since then, he has refused to speculate, but Valeo has outlined a goal of quadrupling orders to € 4 billion by the end of next year. In August, Siemens CEO Roland Busch declined to ask questions about the German company’s plans, saying that in terms of value, JV would provide a “happy future.”

Debt burden

Potential transactions for Valeo could be transformative, but there are concerns that the JV’s total debt burden could be € 2.23 billion, according to the annual report.

In a broader sense, investors are also concerned that automakers could move the production of certain EV parts in-house, affecting suppliers such as Valeo, Continental, Vitesco and Robert Bosch GmbH.

“This will be a very competitive business,” said Michael Foundoukidis, an analyst at Oddo Bhf. The Valeo-Siemens JV has received many orders in the past, but it is unclear if this will withstand the next wave of EV development.

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Valeo is ready to buy Siemens from EV Parts Venture

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The post Valeo is ready to buy Siemens from EV Parts Venture appeared first on Eminetra.

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