Standard Motor Products Forms Joint Venture with Chinese A/C Company
Standard Motor Products Inc. (SMP) reports it has formed a joint venture with Foshan Guangdong Automotive Air Conditioning Co. Ltd. (FGD), a China-based manufacturer of air conditioning compressors for the automotive aftermarket and the Chinese original equipment market. SMP will invest approximately $12.5 million in the 50/50 joint venture. The new company is named Foshan FGD SMP Automotive Compressor Co. LTD.
Eric Sills, SMP’s chief executive officer and president, says, “We are very pleased to announce the formation of the FGD joint venture. FGD has been an excellent supplier to us of air conditioning compressors for several years. Additionally, they have begun making inroads with Chinese vehicle manufacturers.
“We believe that this transaction will enhance our position as a basic low-cost manufacturer and a leading supplier of temperature control parts to the aftermarket, as well as provide SMP with growth opportunities in the rapidly expanding China market. We welcome FGD into the Standard family,” says Sills.
“We believe the transaction will be accretive to earnings in year one, excluding one-time integration costs.”