Auto parts maker Visteon Corp. will sell its automotive lighting business to the India-based Varroc Group for $92 million in cash, a deal the company expects to close in the third quarter of 2012, the company said Monday.
Visteon, which is based in Van Buren Township, Mich., said the sale includes a wide range of exterior lighting products to global vehicle manufacturers throughout Europe, North America and Asia. That business brought $531 million in revenue to Visteon last year. Visteon had more than $8 billion in total revenue last year.
Products of the lighting business include front and rear lighting systems, auxiliary lamps, projectors and electronic models. Visteon CEO Donald J. Stebbins said in a statement that the sale will help Visteon emphasize other branches of its business.
This transaction allows Visteon to focus on our core climate and electronics businesses and our joint venture relationships, which are positioned for profitable growth and market leadership, Stebbins said. We are pleased to be selling our lighting business, with its many competitive strengths, to a successful and growing company with 26 manufacturing plants and three engineering centers, where we think it will be an excellent strategic fit.
Visteon emerged from a 16-month bankruptcy in 2010, and this sale has been part of its management's plan to shed costs from operations like lighting, which get less revenue than other operations like climate control, interiors and electronics. In February, Visteon said it had posted a net quarterly loss sand said it would look to up profit margins through the sale of such operations.
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Visteon will transfer to Varroc plants in the Czech Republic, Mexico and India. About 4,200 manufacturing, engineering and administrative jobs are involved in the transfer.
Varroc, based in Aurangabad, India, makes parts for passenger and commercial vehicles. According to the company's Web site, customers for passenger cars include Fiat SpA, General Motors Co., Volkswagen AG and Audi AG.
Visteon's lighting business is a successful operation with strong products, technology and customer relationships, said Tarang Jain, the managing director of Varroc. Upon completing this transaction, we look forward to working with the customers and talented associates of this business to focus on growing what will be a very important part of our global business in the future.
Visteon shares fell 28 cents to $52.83 in midday trading.