Cummins buying into Faurecia exhaust system business

Cummins announced it has entered into a definitive agreement with Faurecia, a company of the Forvia Group, to purchase two of Faurecia’s commercial vehicle system manufacturing plants and their related activities for €142 million (approximately US$153.6 million). The manufacturing facilities are located in Columbus, Indiana, U.S.A., and Roermond, the Netherlands.

Cummins is acquiring two Faurecia manufacturing facilities that supply components for diesel engine aftertreatment systems, including one in Columbus, Ind. (Photo: Faurecia)

The transaction, which is subject to customary closing conditions, receipt of applicable regulatory approvals in the United States, Germany and the Netherlands, and favorable completion of the consultation process with the works council and trade unions in Roermond, is expected to close by the end of the calendar year.

“Cummins and Faurecia have a long partnership history,” said Cary Chenanda, vice president of Cummins Emission Solutions (CES). “This proposed acquisition would enable both organizations to meet long-term strategic goals and would preserve business operations and employment for talented employees within the two plants and related tech centers, while creating value for customers and suppliers across the entire supply chain. Cummins is committed to meeting or exceeding global emissions regulations now and in the coming years, and I am energized by this unique opportunity to gain experienced technical and manufacturing resources that would carry us far into the future.”

Faurecia has been a partner and supplier to Cummins for more than a decade, providing components for aftertreatment systems used on Cummins diesel engines. The Forvia Group’s divestment initiatives offered Cummins an opportunity to ensure the long-term supply of aftertreatment components and assemblies. The acquisition adds significant technical and manufacturing resources and enhances Cummins’ existing mixer portfolio. Cummins said the assets position the CES business for long-term success.

Cummins said it is committed to honoring Faurecia’s existing supplier and customer contracts in both facilities and will, following closing of the transaction, make the necessary investments to deliver on the contracts. Cummins and the Columbus South and Roermond plants remain separate entities today and will continue to operate independently of each other until the acquisition closes.

“I appreciate Faurecia’s engagement and attentiveness during the due diligence process, and I believe this potential acquisition would be in the sound interest of all parties,” Chenanda said. “We are excited to build relationships with new customers and suppliers. Signing this agreement marks a significant milestone in our partnership with the Roermond and Columbus facilities, but it does not change our relationship in other global locations. We will maintain ongoing relationships with Faurecia in Brazil, China, India and South Africa.”