Lear to Acquire Kongsberg Automotive's Interior Comfort Systems Business Unit

Rhea-AI Summary

Lear Corporation (NYSE: LEA) announced its acquisition of Kongsberg Automotive's Interior Comfort Systems (ICS) business for €175 million. This strategic move aims to enhance Lear's vertical integration and diversify its product offerings in comfort seating solutions, catering to rising automotive demands for features like lumbar support and seat ventilation. The ICS unit is expected to generate approximately $300 million in revenue this year and includes over 3,800 employees globally. The deal is anticipated to close in Q1 2022, subject to regulatory approvals.

Positive

• Acquisition of Kongsberg Automotive's ICS business enhances Lear's vertical integration.
• Expected additional revenue of approximately $300 million from ICS in the current year.
• Strengthens Lear's product offerings in comfort seating, aligning with market trends.

Negative

• The acquisition will likely be funded through debt financing, which could add financial strain.

SOUTHFIELD, Mich., Oct. 28, 2021 /PRNewswire/ -- Lear Corporation (NYSE: LEA), a global automotive technology leader in Seating and E-Systems, today announced that it has entered into a definitive agreement to acquire substantially all of Kongsberg Automotive's Interior Comfort Systems (ICS) business unit.

Kongsberg Automotive's ICS business unit specializes in comfort seating solutions, with a leadership position in seating product areas experiencing growth within the auto industry – massage, lumbar, seat heat and ventilation. With almost 50 years of experience, the ICS business unit has cutting-edge technology, a well-balanced customer portfolio built on longstanding relationships with leading premium automakers and an experienced and dedicated team.

The purchase of Kongsberg Automotive's ICS business unit will further advance Lear's vertical integration and expand product offerings into specialized comfort seating solutions that improve vehicle performance and packaging – important benefits as more customers demand these features across various vehicle segments.

"By integrating Kongsberg Automotive's Interior Comfort Systems business unit into our operations, we will build on our strengths in design, engineering and operational excellence – advancing our strategy to offer a complete suite of premier comfort seat systems to our customers and ultimately to consumers," said Ray Scott, Lear President and CEO. "This acquisition represents an opportunity for Lear to capture more content-per-vehicle by providing an optimized solution with a better value proposition for our customers, in terms of cost, quality and performance. Lear looks forward to welcoming the talented ICS workforce to our team."

Under the terms of the deal, Lear will acquire Kongsberg Automotive's ICS business unit for €175 million, on a cash and debt free basis. The transaction, subject to regulatory approvals and other customary closing conditions and adjustments, is expected to close in the first quarter of 2022. Market dependent, the acquisition will likely be funded through debt financing.

Lear is leading an era of unprecedented evolution in automotive seating innovation. The acquisition of Kongsberg Automotive's ICS business unit will provide additional resources to proactively adapt to emerging market trends and customer demand.

"As automakers look for greater product differentiation, increased efficiency and improved performance, especially in the luxury, SUV and electric vehicle segments, Lear is integrating seating comfort with more features," said Frank Orsini, Lear Executive Vice President and President, Seating. "This acquisition complements our strategic portfolio of vertically integrated design solutions and comfort capabilities."

Kongsberg Automotive's ICS business unit brings operational leadership personnel and more than 3,800 employees globally from its production, engineering and sales facilities throughout Asia, Europe and North America and is expected to generate approximately $300 million in revenue this year.

"I am convinced our ICS employees will be in good hands and continue to thrive at a much larger scale at Lear, our longstanding partner," said Joerg Buchheim, President and CEO of Kongsberg Automotive, adding, "For Kongsberg Automotive, the transaction provides us the room for additional financial maneuvering  and allows us to fully concentrate on our path towards highly-focused and profitable growth."

Forward-Looking Statements

The forward-looking statements in this press release are made as of the date hereof, and the Company does not assume any obligation to update, amend or clarify them to reflect events, new information or circumstances occurring after the date hereof.

About Kongsberg Automotive ASA

Kongsberg Automotive provides world class products to the global vehicle industry. Our products enhance the driving experience, making it safer, more comfortable and sustainable. With approximately 11,000 employees in 19 countries, Kongsberg Automotive is truly a global supplier. The company has more than 27 production facilities worldwide. The product portfolio includes seat comfort systems, driver and motion control systems, fluid assemblies, and industrial driver interface products developed for global vehicle manufacturers. Find more information at www.kongsbergautomotive.com.

About Lear Corporation 

Lear, a global automotive technology leader in Seating and E-Systems, enables superior in-vehicle experiences for consumers around the world. Lear's diverse team of talented employees in 38 countries is driven by a commitment to innovation, operational excellence, and sustainability. Lear is Making every drive better™ by providing the technology for safer, smarter, and more comfortable journeys. Lear, headquartered in Southfield, Michigan, serves every major automaker in the world and ranks 179 on the Fortune 500. Further information about Lear is available at lear.com or on Twitter @LearCorporation.

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SOURCE Lear Corporation

FAQ

What is Lear Corporation's acquisition of Kongsberg Automotive's ICS business about?

Lear Corporation is acquiring Kongsberg Automotive's Interior Comfort Systems business to enhance its product offerings and vertical integration in comfort seating solutions.

How much is Lear Corporation paying for Kongsberg Automotive's ICS business?

Lear Corporation is acquiring the ICS business for €175 million, on a cash and debt-free basis.

What revenue is expected from Kongsberg Automotive's ICS business this year?

The ICS business is expected to generate approximately $300 million in revenue this year.

When is the acquisition of Kongsberg Automotive's ICS business expected to close?

The acquisition is expected to close in the first quarter of 2022, pending regulatory approvals.

How will the acquisition impact Lear Corporation's market position?

The acquisition is expected to improve Lear's market position by enabling it to offer a complete suite of advanced comfort seat systems.