Faurecia Sells Interior Business For €1.82 Billion

Europe’s automotive supply chain faces another major asset divestiture as an automotive parts supplier…Faurecia (Forvia)A deal has been reached to sell its interior business group to a fund managed by Apollo Global Management through a business spin-off transaction, with an enterprise valuation of the business at…1.82 billion eurosThe Interior Systems division primarily supplies cockpit components to major global automotive OEMs, covering core products such as instrument panels, door trim panels, and center consoles. The divested interior business operates across 19 countries globally, with 59 manufacturing facilities and 8 R&D centers, employing over 31,000 people.

According to the terms of the transaction agreement, Apollo's funds will provide financial and resource support for the development and strategic transformation of the business after it operates independently. Faurecia stated that after the completion of the transaction and all adjustments, this asset disposal is expected to generate proceeds for the company.Reduce net debt by at least €1 billionAfter the completion of the transaction and delivery, all net proceeds from the transaction will be used to repay financial debts, strengthen the resilience of the group's balance sheet, and enhance financial flexibility, in line with the core strategic objective of the management to optimize the group's overall financial structure.

Franz Fehrenbach, CEO of Faurecia, said: "The announcement of this transaction fully demonstrates the industry strength and leading position of Faurecia's interior business, as well as the professional capabilities and dedication of the team. This business segment has a solid industrial foundation, a clear market positioning, and significant potential for value growth. Here, I would like to express my gratitude to all employees of the interior business for their hard work. We believe that Apollo has sufficient industry experience and comprehensive strength to help the interior business group enter a new stage of growth."

In fiscal year 2025, the interior business segment generated revenue of 4.81 billion euros, a 5.7% decrease compared to the previous year, accounting for approximately 18% of the group's consolidated revenue; the adjusted EBITDA for the same period was 582 million euros. The transaction price corresponds to this business.EBITDA multiple is 3.1 timesIf excluding the impact of research and development capitalization and lease-related items, the valuation multiple would rise to 4.8 times.

Fraik said that this sale is the company'sIGNITE StrategyOne of the core initiatives of this strategy. Through this strategy, the company will further focus on high-value-added, technology-driven core businesses while optimizing its balance sheet and strengthening its financial health. Currently, this transaction is still subject to regulatory approvals in multiple countries and the completion of consultations with employee representative bodies, and is expected to close inend of 2026Formally completed the delivery.

Apollo Partner Michael Reiss added, "The current automotive interior industry is undergoing rapid changes, with vehicle manufacturers increasingly relying on cabin design, premium materials, and cutting-edge technology to create differentiated product competitiveness. With an independent operating model, a dedicated management team, and ample resources, Faurecia's interior business will fully leverage industry trends to continuously create greater value for global vehicle manufacturing partners."

Faurecia is currently experiencing weak overall operational performance. While advancing the sale of its interiors business, Faurecia simultaneously released its Q1 fiscal year 2026 operational results. The Group reported revenue of approximately €5.1 billion in the first quarter, a 6.4% year-over-year decline. Excluding the Chinese market, all other regions achieved organic revenue growth. The Group specifically highlighted accelerated growth in the Indian market and the ongoing diversification of its customer base in China as positive developments, and it maintained its full-year 2026 financial guidance unchanged. Over the coming months, the Group will continue to rigorously implement cost control and cash flow management strategies, fully offsetting all cost inflation pressures through supply chain optimization and cost pass-through mechanisms.

Valeo was formed in early 2022 through the merger of French Faurecia's acquisition of German Hella. The French group remains deeply mired in financial distress: its current net debt stands at €6 billion, and its debt level amounts to 1.7 times its adjusted operating profit. CEO Martin Fischer plans to reduce this debt-to-profit multiple to 1.2 times by 2028.

In addition, the group also announced personnel changes: the chairman of the supervisory board, who is 75 years old, will...Michel de RosenAbout to step down, 68 years old.Pierre André ‌de ChalendarThe incoming chairman will officially assume office following the shareholders' meeting on June 4.Pierre André ‌de ChalendarWith over 30 years of management experience in French and global industrial sectors, he has held numerous senior executive positions. He served as CEO of the French automotive supplier Saint-Gobain Group from 2007 to 2021 and as Chairman of the Group's Supervisory Board from 2010 to 2024.