(ALV) Autoliv Acquires Remaining Shares of Japanese Joint Venture

January 20th, 2010

Autoliv Inc. (ALV) has decided to acquire the remaining 40% of shares in its joint venture (JV) Autoliv Nichiyu Co. Ltd, located in Aichi Prefecture, Japan. The JV, formed in 1988, manufactures airbag inflators for the domestic market and is one of Autoliv’s five manufacturing facilities in the country.

Autoliv Nichiyu has annual sales of about $35 million, the lion’s share of which is generated internally from sales to other Autoliv companies. Apart from this JV, all other operations in the country are controlled as wholly owned subsidiaries by the company.

Autoliv holds an inflator market share of approximately 30% in Japan. Major customers include Toyota, Nissan, Honda, Mitsubishi, Mazda and Suzuki.

Post the acquisition, Autoliv Nichiyu Co. Ltd will be re-named Autoliv Aichi Co., Ltd. The deal is expected to close as of today.

Autoliv has shown a profit of $33.7 million or 37 cents per share in the third quarter of the year, after reporting losses for the preceding three quarters. With this, the Sweden-based manufacturer of occupant restraint systems for automobiles has also beaten the Zacks Consensus Estimate of 24 cents per share.

Nevertheless, earnings declined from $34 million, or 44 cents per share, in the same quarter of 2008. Consolidated net sales declined 14% to $1.33 billion while organic sales (i.e., sales excluding currency effects and acquisitions/divestitures) fell 12%.

Zacks Investment Research

More on this topic (What's this?)
Godzilla Will Come Out of Tokyo Bay Before Japan Rebounds (Money Morning, 2/2/12)
Autoliv (ADR) Earnings Estimate $ALV (Robert Weinstein Trading Blog, 10/24/11)
Lessons From Japan’s Great Depression (Investment U, 3/6/09)
Investing in Japan: Lots of Potential, Little Growth (Money Morning, 3/26/09)
Read more on Autoliv, Investing in Japan at Wikinvest

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