Valeo announced that it had signed an agreement with its longstanding South Korean partner, PHC Group, to create a joint venture set to become the world leader in torque converters for automatic and continuous variable transmissions.
Having obtained the necessary regulatory approvals, Valeo and its partner PHC Group today confirmed that the transaction has been completed.
The company will employ approximately 3,150 people and will be controlled and fully consolidated by Valeo. It is forecast to generate sales of around 1 billion euros on an annual basis and will be accretive to Valeo’s operating margin from its first fiscal year.
Valeo-Kapec will capitalize on the two partners’ strong geographic, product and business complementarity to create purchasing, manufacturing and, above all, R&D synergies.
“By strengthening our ties with our long-standing South Korean partner and creating this joint venture, we will double our sales of torque converters for automatic and continuous variable transmissions and become the world leader in this high-technology product line,” said Jacques Aschenbroich, Valeo’s Chairman and Chief Executive Officer. “And by stepping up our presence in South Korea and increasing sales to Hyundai-Kia, we expect our sales in Asia to increase by around 500 million euros.”