Creation of a new joint venture Valeo-Kapec
Valeo signs an agreement with its long-standing South Korean partner Pyeong Hwa Group to create a 50/50 joint venture in the transmission field. The new company will be called Valeo-Kapec.
Valeo-Kapec, headquartered in Daegu in South Korea, will have a global manufacturing footprint to become the world leader in torque converters for automatic and continuous variable transmissions.
Each partner will contribute to this Joint-Venture its respective Torque Converter business, located for Valeo at Nanjing (China), Atsugi (Japan), San Luis Potosi (Mexico) and Troy (USA) and located for Kapec in Daegu, Waegwan and Seongju (South Korea).
The new company will employ approximately 3,000 people and will be controlled and fully consolidated by Valeo. It is contemplated that the Joint-Venture will generate around €1 billion sales on an annual basis and will be accretive to Valeo’s operating margin for its first fiscal year.
Valeo-Kapec will capitalize on strong geographic, product and business complementarity to create purchasing, manufacturing and, above all, R&D synergies.
The agreement is subject to approval by the competent authorities.
"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."