Nissan Motor Co Ltd (ADR)(OTCMKTS:NSANY) has agreed to offer its 41% interest in major parts supplier Calsonic Kansei to Kohlberg Kravis Roberts. The contract will be reported soon. KKR will introduce a tender offer to get all outstanding shares in the firm for a projected 400 billion yen. The carmaker will make proceeds of almost 200 billion yen, which will be deployed to accelerate advancement of new environmental and safety technologies.
The highlights
Calsonic Kansei manufacturers such conventional components as exhaust systems and radiators. The company has been recalibrating group businesses to sharpen focus on such next-gen technologies as autonomous driving. Nissan solicited bids and allowed preferential negotiation rights to KKR, which provided the best terms.
Calsonic Kansei is listed on the first part of the Tokyo Stock Exchange, has turned to be the largest autoparts manufacturer in the Nissan group. It recorded an operating profit of 38.2 billion yen while sales came at 1.05 trillion yen for the fiscal year closed March 31. Over 80% of its sales come from operations with Nissan. Calsonic Kasei will coordinate to broaden its client base as a sole dealer under KKR. In line with measures to expand group businesses into new areas, French partner Renault and Nissan bought a French startup in cloud-based data assessment in September.
Nissan Motor’s sale of its core subsidiary reflects the degree to which CEO Carlos Ghosn is prepared to dismantle the Japanese automaker’s dealer network, taking an unique path from peer Toyota Motor. The company confirmed its plans to sell 41% interest in Calsonic Kansei to Kohlberg Kravis Roberts, which plans to purchase the rest of the parts maker through a tender offer in coming year. At an offer price quoted at 1,860 yen per share, a comprehensive acquisition would come around 498.3 billion yen and mark KKR’s biggest deal in Japan to date.
For Nissan, dealers hardly come central to its businesses than Calsonic. It is a star and behind-the-scenes player in its own right, integrating technical prowess as a premium dealer with an outward presence that enthusiasts of motor sports know.
