Lear to Sell European Unit

Lear(LEA Quote), an automotive interior systems supplier, said Thursday that it entered into a definitive agreement with its joint venture International Automotive Components Group.

The agreement is to contribute substantially, all of Lear's European interiors systems division to IAC, for a 34% equity interest in IAC, subject to adjustment.

The Europe operations consist of nine manufacturing facilities in five countries, that supply door panels, overhead systems, instrument panels, cockpits and interior trim to various original equipment manufacturers, generating about $750 million in annual revenue.

Lear is expected to recognize a loss on sale of about $40 million due to the transaction, which is expected to occur in the third quarter.

"We have been focused on developing a solution to address operating challenges in this segment and we believe the European transaction is a positive development for our customers and our shareholders," said the company. "We also are continuing to focus our attention on a solution for our North American interiors business."