China’s white goods manufacturer Hisense Home Appliances Group will acquire Japan’s automotive air-conditioning manufacturer Sanden for JPY 21.4 billion (about RM 809.7 million).
The move will allow Hisense to diversify into the automotive air-conditioning system market. Hisense has ambitions to manufacture air-conditioning units for electric vehicles.
In an announcement by Sanden made earlier this week, the company says Hisense will acquire 75 percent of voting rights in the company for 21.4 billion Yen.
Sanden is currently the world’s second largest manufacturer for automotive air-conditioning, behind Denso.
However, Sanden’s core automotive business has been struggling for the last two years, due to slowing car sales in major markets like China, and the Covid-19 pandemic hit it especially hard.
Major factories of the Sanden Group, chiefly in China, Europe and Asia, were forced to suspend operations for a while in 2020 because of the Covid-19 pandemic.
“As a result, the group has been facing extremely difficult situation during the fiscal year ended March 2020; sales in the automotive systems segment decreased by 21% to 153,776 million yen and there was a segment loss of 5,303 million yen compared with a profit of 560 million yen in the previous fiscal year. As of March 31, 2020, the total borrowings and bonds increased to 100,252 million yen, which was substantial amount compared with cash and cash equivalents of 23,711 million yen, and operating cash flow of 7,219 million yen for the fiscal year ended March 2020, and the current liabilities was more than current assets,” said the company.