Faurecia to buy Hitachi’s car navigation unit for €1.1bn

French car parts maker Faurecia has agreed to acquire Hitachi’s car navigation unit for €1.1bn in the latest industry shake-up driven by a growing focus on autonomous driving.

Under the deal, Faurecia, a maker of vehicle interiors and car seats, said it would offer ¥2,500 per share for Hitachi’s unit Clarion, representing a 10.5 per cent premium to Thursday’s closing price.

Traditional car parts suppliers have come under pressure in the wake of an industry shift towards electric and self-driving technologies.

Earlier this week. Fiat Chrysler Automobiles also struck a deal to sell component maker Magneti Marelli to a rival Japanese parts maker owned by KKR for €6.2bn.

Faurecia said it was particularly interested in using Clarion’s technology in image processing, sensing and driver information to strengthen its cockpit systems offering in an age of autonomous driving.

“This project is very exciting for Faurecia as it would position us as a leading player for cockpit systems integration, able to offer unique user experiences,” Patrick Koller, Faurecia’s chief executive, said in a statement.

In recent years, Japanese technology companies including Hitachi, Panasonic and Sony have been selling businesses no longer central to their growth strategy as they seek to find new drivers of profit.

The ¥141bn sale of Clarion, which is 63.8 per cent owned by Hitachi, has been rumoured for months with event-driven hedge funds driving up shares in Clarion up by more than 50 per cent since mid-September, including a 3.8 per cent rise on Friday.

On Thursday, Clarion reported a 85 per cent drop in net profit for the fiscal first-half as sales declined in the US and Japan.