NOVI, Mich.—Cooper Standard Holdings Inc. has agreed to purchase an additional 47.5 percent of Huayu-Cooper Standard Sealing Systems Co. Ltd., its joint venture with Huayu Automotive Systems Co., and become the 95 percent equity owner of the business.
The firm invested $60 million to purchase Huayu Automotive Systems' stake, said Jeffrey Edwards, Cooper Standard chairman and CEO. The remaining 5 percent will be retained by the Shanghai Zhaotun Collective Assets Managing Co.
Cooper Standard said the joint venture reported 2013 sales of $187 million.
The acquisition is anticipated to close in the first quarter of 2015 and is subject to Chinese regulatory and other approvals, Cooper Standard said. If approved, the acquisition will give the firm an additional nine manufacturing facilities and two technical centers in China, bringing its total Chinese manufacturing presence for sealing and trim to 12 facilities.
Edwards said Asia, specifically China, represents the largest growth opportunity between now and 2020.
“Our global customers continue to invest heavily in China's automotive market,” Edwards said. “As a global Tier 1 supplier to them, it's imperative that we continue to produce and support their requirements in China. The industry soon will produce 30 percent of all units in China, so going forward it continues to be a very strong growth market.”
The acquisition comes on the heels of three other major moves for Cooper Standard in the Asia-Pacific region, most geared toward the Chinese market. The firm announced its intention to form a joint venture with Inoac Corp. of Japan to expand the reach of its fluid transfer systems products. The deal is expected to close in the third quarter, with Cooper Standard owning 51 percent of the new firm—Cooper Standard Inoac Pte. Ltd.
The firm opened its Asia-Pacific Technical Center in Shanghai and is in the process of relocating employees from its Asia-Pacific headquarters in Kunshan, China, to the new Shanghai facility. Kunshan is about 35 miles west of Shanghai.
And in India, the firm just opened another sealing and trim facility in Bawal with a second in Sanand on target to open in early 2015, Edwards said.
“Asia is critical for us because it's critical for the industry and our customers,” Edwards said. “As the market increases from 80 million to 100 million units and China begins to produce 30-plus percent of those, the Japanese auto makers are responsible today for 30 percent of the global share, so it puts an important emphasis on the Asia region and customer base.”