Photo by Faurecia Faurecia's composite Urban Liftgate.

In a consolidation of the French automotive sector, Faurecia is selling its automotive exteriors business to Plastic Omnium in a transaction valued at €665m. The companies signed a memorandum of understanding on December 14.

The deal does not include Faurecia’s composites business, its plant for Smart in Hambach, France, or two joint ventures in Brazil and China. The business to be sold, which includes bumpers and front end modules, had 2014 sales of €2bn, according to a news release. About 90% of the business is located in Europe.

The acquisition would nudge Plastic Omnium to above €8bn in sales, placing it among the 25 largest automotive suppliers worldwide. Its greater reach will also enhance its ability to support larger contracts that are resulting from the globalization of vehicle platforms.

Plastic Omnium also manufactures fuel tanks, painted body panels and plastic structural parts.

Faurecia says the sale, combined with the redemption of a convertible bond, will almost eliminate the company’s net debt, better positioning the company to invest in its remaining sectors.

In addition to its automotive seating and emissions control technologies businesses, Faurecia is dedicated to strengthening its interiors systems division, as company executives reiterated in recent comments to Plastics News.

Faurecia also has big plans for its composites business, which develops parts including an all-composite liftgate and an exposed-carbon fibre roof, as well as interior and seating components. Company leaders are confident composites will be “very useful” in the long term, chief financial officer Michel Favre said in a conference call on December 14. As automakers continue to look for ways to remove weight from vehicles to help meet emissions standards, Faurecia expects the demand for composite products to grow, especially 2020 and later, he said.

The sale is expected to close in 2016, pending approval from antitrust authorities and consultation with employee representative groups, the companies announced.

Faurecia is currently first in Plastics News Europe’s annual rankings of Europe’s largest injection moulders, while Plastic Omnium is fourth.