Dive Brief:
- Cummins signed an agreement with Faurecia to purchase manufacturing plants in Columbus, Indiana, and Roermond, Netherlands for €142 million ($153 million), according to a May 23 news release.
- The sale involves Faurecia’s commercial vehicle exhaust aftertreatment business, providing Cummins with long-term access to key supplies. The two companies have worked together for over a decade.
- Faurecia said the sale ensures the long-term viability of the two plants and their employees. The deal would cover about 1,100 employees, all of which Cummins expects to retain, Cummins spokesperson Jon Mills said in an email.
Dive Insight:
Both companies said the deal would help them push towards their goals to reduce emissions — albeit in different ways.
“The acquisition would add talented manufacturing and technical resources to Cummins’ workforce, position Cummins closer to key suppliers and consumers in Europe and North America and expand Cummins’ mixer portfolio,” Mills said.
The additional mixer intellectual property is important for aftertreatment performance and to help Cummins meet future emissions regulations on its path to zero emissions, he wrote.
Last year, Cummins launched a vision and strategy to focus on its goal to reach net-zero emissions by 2050.
Along that path, the Bipartisan Infrastructure Law and Inflation Reduction Act helped spur Cummins to announce $1 billion in April for spending on facilities across Indiana, New York and North Carolina.
Those Biden administration laws played a vital role in Cummins’ decision to manufacture products in the U.S. and create more clean-tech jobs, Cummins President and CEO Jennifer Rumsey previously noted.
Faurecia CEO Patrick Koller had previously said a sale of facilities to Cummins would also help it with its environmental goals. “With this transaction, the Group's exposure to internal combustion engine in 2025 would reduce towards 10%,” Koller said in February.
Faurecia will continue operating its aftertreatment business in other areas around the globe according to the news release. Cary Chenanda, vice president of emission solutions at Cummins, said the company will maintain ongoing relationships with Faurecia in Brazil, China, India and South Africa.
The transaction is slated to close by the end of this year.
