Visteon Corp. (VC) on Tuesday confirmed it is in talks with a Korean private equity firm to sell its ownership stake in Halla Visteon Climate Control Corp., a final step in the autoparts maker's long-running restructuring program.
Van Buren Township, Mich.-based Visteon said it is engaged in discussions with Hahn & Co. over its 70% Halla Visteon stake, but offered no further details. A deal, if finalized, would likely be substantial, with local Korean media reports valuing the Halla stake at about 4 trillion won ($3.6 billion).
A deal would split Visteon's climate control business from its auto electronics operations, continuing a streamlining process that began soon after Visteon was spun out of Ford Motor Co. in 2000. Visteon gave back much of its high-cost footprint ahead of a 2009 bankruptcy, and in recent years has announced deals including a May sale of its global interiors business to an affiliate of Cerberus Capital Management LP.
Halla Climate, a one-time unit of South Korea's Halla Group, has been affiliated with Ford and then Visteon since the mid-1980s. The unit acquired Visteon's climate control operations outright in January 2013, giving the U.S. autoparts company a controlling stake.
Visteon executives have long complained that despite the cuts, Visteon suffered from a conglomerate discount, saying the market was failing to assign a robust value to its two remaining parts. Analysts have predicted a split was likely, though there has been some concern that Visteon could face hurdles managing tax credits should it sell the unit instead of spinning it out to shareholders.