Valeo will purchase the stake it does not yet own in its lighting joint venture Valeo Sylvania from partner Osram for $104 million. The purchase price is around three times the Valeo Sylvania's earnings before interest, taxes, depreciation and amortization, Valeo said in a statement. "The takeover of Osram's shares in Valeo Sylvania represents a major step in Valeo's strategy to increase its position as a global leader in automotive lighting," Valeo chief executive Jacques Aschenbroich said.
The company expects the agreement to be completed by the end of January. IHS Automotive analyst Andrew Herzig remarked that the purchase will help “align Valeo's automotive lighting presence worldwide by adding North American sales to the rest of its lighting business worldwide."
Herzig, whose specialization lies in European component forecasts and analysis, estimates that Valeo Sylvania is already one of the top five suppliers of headlamps and tail lights in North America. HIS estimates that Valeo is one of the largest European auto lighting company along with Magneti Marelli and Hella.
Herzig expects Valeo to find "big opportunities" in global automotive exterior lighting in the coming decade, as LEDs are increasingly becoming in demand. "Adaptive headlamps have and will continue to develop with the advantages that LEDs offer," Herzig said. Valeo Sylvania has sites in Indiana and Queretaro, Mexico.