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Adient and Yanfeng to Restructure JVs

Auto News - Published on Thu, 13 Feb 2020

Image Source: Adient Yanfeng
Global leader in automotive seating Adient has entered into a definitive agreement with Yanfeng Automotive Trim Systems Co Ltd to make certain changes to their existing joint venture relationships. As part of these changes, Adient has agreed to sell its 30 percent ownership stake in YFAI to Yanfeng for USD 379 million. Adient and Yanfeng have also agreed to extend the term of their YFAS joint venture to December 31, 2038. In addition, Adient has agreed to sell certain patents and other intellectual property exclusively used in its seating mechanisms business to AYM for USD 20 million, and AYM will license such intellectual property back to Adient. Going forward, Adient and AYM have also agreed to license to each other certain other intellectual property related to the seating mechanisms business.

Further, Adient and Yanfeng have agreed to amend the AYM joint venture agreement to update AYM’s business scope to allow AYM to carry out its seating mechanisms business both in and outside of the People’s Republic of China for both PRC and non-PRC customers. Adient intends to leverage AYM’s expanded presence in the global seating mechanisms market as it continues to right-size its own metals business. The amended AYM joint venture agreement also will reflect certain governance changes such that Yanfeng will have consolidation rights of AYM’s financial results. Adient will continue to hold a 50 percent ownership interest in AYM.

The agreed transactions are cross-conditioned on each other and closing is subject to regulatory approvals and other customary closing conditions. Adient expects the transactions to be completed within its 2020 fiscal year.

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Posted By : Arun Huidrom on Thu, 13 Feb 2020
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