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Nissan to sell stake in auto parts supplier Calsonic Kansei to KKR

Published 23 November 2016

Nissan Motor has agreed to divest its 41% stake in Japanese auto parts firm Calsonic Kansei to private equity firm KKR for JPY498.3bn ($4.5bn).

This deal is being regarded as one of the largest deals in Japan, particularly in the automotive spares industry.

KKR plans to pay ¥1860 ($16.77) per common share to the existing shareholders of Calsonic Kansei.

Reuters reported that the equity firm succeeded in beating Bain Capital and MBK Partners, who were also part of the bid to buy stake in the company.

The deal comes at a time when Nissan is looking to finance in areas such as development of new technologies including electric vehicles and self-driving vehicles.

The automaker recently bought a controlling stake in Mitsubishi Motor.

Calsonic Kansei produces auto parts such as interiors, electronics, air conditioning units and compressors. 80% of the company’s global sales belong to Nissan.

Nissan chief competitive officer Yasuhiro Yamauchi said: "This agreement was reached because we share common interests and goals.

“Nissan is hoping to further increase the competitiveness of Calsonic Kansei—one of our most important partners—and KKR recognizes the company's potential. This is also the best choice for Calsonic Kansei and its shareholders."

KKR Member and KKR Japan CEO Hiro Hirano said: "Calsonic Kansei is a best-in-class auto-parts manufacturer that supplies high-quality products to the world's largest automotive brands.

“As a partner to Calsonic Kansei's management team, we aim to assist the company in achieving its growth ambitions and make available our international network and industry expertise to continue Calsonic Kansei's success globally."

Wall Street Journal reported that Nissan had been injecting cash into Calsonic Kansei before it decided to sell the company and invited bids for the same.

In 2005, Nissan bought additional stake in the company, which grew from 28% to the present 41%.

Image: Nissan to sell its stake in Calsonic Kansei for $4.5bn. Photo: Courtesy of TTTNIS/Wikipedia.