Toray Agrees to Acquire Alva Sweden AB

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Aug. 28, 2019

Toray Industries, Inc.

August 28, 2019, Tokyo – Toray Industries, Inc. today announced that it has concluded an agreement with AB Anders Westerlind to decision to purchase all of the shares of Alva Sweden AB (“ASE”), a manufacturer of cushions for automotive airbag systems, and acquire ASE and its two subsidiaries, Alva Confecções S.A. of Portugal and Alva Tunisia SA of Tunisia (these three entities are hereafter collectively referred to as “Alva”). AB Anders Westerlind wholly owns ASE.
The transaction would close soon after required official procedures are completed.

1. Market Background
The global airbag market is steadily growing. Demand continues to expand supported by tightening of vehicle safety regulations in leading nations together with increasing employment of this safety equipment in the emerging nations. Another positive factor is that requirement for higher performance airbags is rising with the emergence of next-gen vehicles equipped with self-driving and other new technologies which should cause a commensurate need for greater safety.

Toray’s airbag business encompasses nylon fiber production operations in Japan, Thailand, and Mexico and fabric manufacturing sites in Japan, Thailand, China, the Czech Republic, India, and Mexico. The company is taking advantage of the competitiveness of its integrated fiber and fabric capabilities and the global production and sales structure to supply airbag fabric of the same quality from all production sites in a timely manner.

Alva has manufactured cushions for automotive airbag systems in Europe since 1997. It has earned an outstanding reputation among leading European module manufacturers for its own technologies and manufacturing expertise with state-of-the-art facilities.

2. Acquisition Backdrop and Goals
Toray has built positive ties with Alva over the years by supplying it with fabric. The acquisition agreement was the fruit of discussions between the two companies that started in 2018. This was in light of Toray’s desire to accelerate advances in its integrated operations by entering more downstream business of cushions and extending its supply chain, thereby driving ongoing growth in the airbag business in response to the market changes outlined above.

The acquisition should enable Toray to enhance direct relationship and dealings with module manufacturers and, through them, with automakers, and should enable it to swiftly identify the latest airbag development trends and customer needs. Toray also looks to incorporate Alva’s cushion-manufacturing expertise in fabric design to bolster its product development and proposal capabilities by drawing on more robust fiber, fabric, and sewing integration. The company thereby aims to help materialize high-performance airbags by heightening its presence among module manufacturers and automakers.

Toray seeks to further expand its business to capitalize on vigorous demand and needs in the highly promising airbag market.

Profile of Alva Sweden AB
1. Headquarters location Västra Götaland County, Mölndal, Sweden
2. CEO Lars Westerlind
3. Establishment 1948 (set up as apparel maker, initiating cushion production for automotive airbag systems in 1997)
4. Business Selling cushions for automotive airbag systems
5. Sales 32.3 million euros (on consolidated basis in year ended December 31, 2018)
6. Number of employees Around 1,030 (on consolidated basis, at end-2018)
7. Major shareholder (shareholding ratio) AB Anders Westerlind (100%)
8. Production units (1) Alva Confecções S.A. (wholly owned by ASE)
 ・Headquarters location: Sintra, Portugal
 ・Establishment: 1965
 ・Business: Airbag cutting and sewing and sales
(2) Alva Tunisia SA (99.9%-owned by ASE)  
 ・Headquarters location: Ariana, Tunisia
 ・Establishment: 1982  
 ・Business: Airbag cutting and sewing