Leoni acquires the other 50% of Daekyeung

This complete takeover of the joint venture partner, which will thus take place one year sooner than originally planned, is aimed at stepping up tapping of the local automotive market. “Our aim with the help of this brought-forward acquisition is to expand our activity in South Korea more rapidly,” said Uwe H. Lamann, member of Leoni AG’s Management Board in charge of the Wiring Systems Division, in explaining the purchase. “Our objective is by 2015 to virtually double our sales in South Korea by broadening our business with existing customers and gaining new customer projects.” To date, the principal customers of Leoni harnesses and wiring systems in the country include General Motors, SsangYong and Volvo. Daekyeung is based in Busan, South Korea, employs in total about 3,500 people and manufactures at three facilities in China. In addition to Penglai and Weihai, the latest plant is located in Jining, which is situated in a strategically favourable position between Peking, Shanghai and the port city of Qingdao. Since the beginning of this year, the plant has been producing above all for General Motors’ Global Compact Platform. The company, founded in 1989, is likely to generate sales of between EUR 130 and 140 million in the 2012 financial year, and to boost Leoni’s consolidated sales accordingly. With this brought-forward acquisition Leoni will gain full control over the strategic way ahead for its South Korean activities. In particular, the intention is to make progress by tying the three Daekyeung facilities into Leoni’s global production network. The plan is also to expand the development centre in Ansan near Seoul, which already belongs fully to Leoni, and thereby to enhance expertise with respect to new technologies and components. Leoni acquired the initial 50 percent of Daekyeung in June 2008. The two companies signed an agreement to cooperate on development of cable harnesses one year before that.