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Automotive seating supplier Adient said Friday it would sell its 50 percent interest in Yanfeng Adient Seating to its joint venture partner for $1.5 billion in cash, to pursue its strategy in China independently.
In turn, Adient will acquire YFAS’ 50 percent equity interest in Chongqing Yanfeng Adient Automotive Components and 100 percent equity interest in Yanfeng Adient Seating and consolidate those businesses.
Adient CEO Doug Del Grosso said in a statement the deals would offer an opportunity “to drive our China strategy independently and further position the company for future growth in the world’s largest automotive market.”
Adient designs and manufactures seating systems for passenger cars, commercial vehicles and light trucks.
The company, which operates in 32 countries, expects its China business to have nearly $4.5 billion in annual consolidated and unconsolidated sales after it has closed all deals.
Yanfeng will operate the remainder of YFAS as a wholly owned enterprise.
Adient plans to use proceeds to prepay a portion of its debt, following closing of the deal, which is expected in the second half of 2021.
Adient, of Plymouth, Mich., ranks No. 12 on the Automotive News list of the top 100 global suppliers, with 2019 sales to automakers of $16.5 billion.