Asahi Kasei to Acquire US Auto Interior Company for US$1 bn
2018-07-23    [Source:InjectionMouldingAsia]
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Japanese chemical maker Asahi Kasei is to acquire Sage Automotive Interiors, a US-based manufacturer of automotive interior material, for a total acquisition price, including debt, of US$1.06 billion. An agreement regarding the acquisition was concluded between Asahi Kasei and US private equity firm Clearlake Capital Group Holdings, the 100% owner of Sage.

Sage was set up in 2009 when it was spun-off from US fibre and chemical manufacturer Milliken & Company.

During Clearlake's four-year ownership, it acquired Miko S.r.l. and Apollo S.p.A. in Italy, which enabled the company to expand its technical capabilities, product offerings. In addition, the company invested further in its Sage Wuhan joint venture in China to drive more rapid growth in Asia.

Under its Cs for Tomorrow 2018 medium-term strategic initiative, Asahi Kasei says it is focused on expanding automotive-related business as a priority in the material sector. The company is currently working across the sector to strengthen relationships with vehicle manufacturers and their suppliers while expanding operations globally.

The automotive industry is in a period of transformation referred to as CASE, indicating trends toward connected, autonomous, shared, and electric vehicles. Such new trends create significant growth opportunities, including demand for vehicle interiors with greater comfort and innovative design. The market for automotive interior material is thus expected to continue expanding over the longer term.

Asahi Kasei supplies Lamous microfibre suede to Sage, and the two companies have a long-standing mutually beneficial business relationship. A leader in the development and manufacture of material for automotive interiors, Sage holds the No. 1 global share for vehicle seat fabric. Sage has established a strong presence among vehicle manufacturers and their suppliers based on its comprehensive proposal capabilities, advanced design capabilities, and processing technology related to automotive interior material.

Asahi Kasei considered complementing its business portfolio with Sage’s business to be an effective means of accelerating its expansion in the automotive field. Last October the two companies began talks that led to the agreement for Asahi Kasei’s acquisition of Sage.

Asahi Kasei believes the acquisition will strengthen its position in the growing automotive interior material market, contributing to the overall expansion of its automotive-related business. Expected effects of the acquisition include:

Enhanced access to vehicle manufacturers and their suppliers, in order to swiftly and accurately ascertain trends and needs in the automotive industry

Proposal and provision of comprehensive vehicle interior designs and solutions leveraging Sage’s design and marketing capabilities in combination with various Asahi Kasei products such as fibres, plastics, and sensors

Utilising Sage’s sales, manufacturing, and marketing bases as management infrastructure and resources for the global expansion of Asahi Kasei’s operations
Closing of the transaction is conditional upon performing the required procedures in accordance with each relevant country’s antitrust regulations and obtaining approval from the relevant authorities.

Sage has production sites in the US, Italy, Poland, Romania, Brazil, China and around 2,200 employees.

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