NSG Group plans to increase its stake with auto glass in China.
NSG says it will incorporate SYP Kangqiao Autoglass Co., Ltd., an auto glass manufacturer, into its auto glass business.
“This integration into SYP Automotive will strengthen our ability to meet the growing needs of vehicle manufacturers in China,” the company says in a statement. NSG processing plants in Guilin and Tianjin will be transferred to SYP Automotive. NSG Group will re-invest the sale of proceeds back into SYP Automotive in the form of the sale of two wholly owned legal entities owned by NSG, Tianjin NSG Safety Glass Co., Ltd. and Guilin Pilkington Safety Glass Co., Ltd. This sale will increase NSG Group’s stake of 20% in SYP automotive to approximately 29%.
According to the company statement, NSG Group’s decision with this transaction is part of the structural reforms measures set forth in “Revival Plan 24,” the company’s management plan for three years, which began April 1, 2021. “This is an important step in transforming our business portfolio, as a part of our Shape to Shine transformation program,” the statement says. NSG Group’s partnership with SYP began more than 30 years ago, and the company has a 13% stake in SYP.
The transaction will be completed later this year after Chinese regulatory appeals are obtained and proposal deal terms are presented to shareholders in June and approved by shareholders. After completion of the transaction, the company statement says that business performance of NSG Tianjin and NSG Guilin will be included in SYP Automotive’s results and “the share of post-tax profit of joint ventures and associates accounted for using the equity method” line in the consolidated NSG Group income statement.
“Through this integration, NSG Group and SYP Automotive will work in partnership to develop and grow SYP Automotive’s automotive processing business in China. As an active participant in the partnership, NSG will help SYP Automotive to enhance its ability to satisfy increasingly complex demands for glazing solutions, including meeting expectations from established global automakers looking to develop advanced glazing supply inside China,” the company says.