WUHAN, China, June 10, 2021 /PRNewswire/ -- China Automotive Systems, Inc. (Nasdaq: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced that its wholly owned subsidiary, Hubei Henglong Automotive Systems Group Co. Ltd. ("Henglong"), purchased a 40% interest in the issued share capital of Sentient AB ("Sentient"), a Swedish automotive technology company specializing in software development and hardware design for advanced steering functions, vehicle motion control and autonomous driving.
In the transaction, Jingzhou WiseDawn Electric Car Co., Ltd. ("WiseDawn") will transfer and assign a large part of its Sentient shares, representing 40% of the issued share capital of Sentient, to Henglong for total consideration of Euro 20 million in three tranches of cash payments. Two directors of CAAS, Mr. Hanlin Chen and Mr. Qizhou Wu, are the majority and minority owners of WiseDawn.
Founded and headquartered in Gothenburg, Sweden in 2009, Sentient operates seven facilities within Sweden and an office in Suzhou, China. Sentient's software functions for steering, vehicle motion control and autonomous driving can be integrated with its proprietarily designed hardware solutions including powerpacks (SW, ECU, motor, housing) and complete steering gear systems. Sentient currently hold 10 patents in steering, steer-by-wire, motion control and braking. Having been in production and well received by drivers since 2013, Sentient's foundational technology provides a superior driving experience and consistent stability regardless of tire characteristics, steering systems, road friction properties and suspension systems. Sentient's motion control technology has been tested and demonstrated on electric power steering (EPS), angle-overlay systems, steer-by-wire and fully autonomous vehicles (NHTSA level 3-5).
A special committee was formed by three independent directors of CAAS to review this purchase. The special committee engaged a legal advisor, and a financial advisor who provided a Fairness Opinion as to the transaction's valuation.
Mr. Qizhou Wu, chief executive officer of CAAS, commented, "We are thrilled to welcome Sentient, the world leader in steering and vehicle control software and hardware, to join us, China's largest power steering producer, to create a vertically-integrated automotive technology company. With the rise of artificial intelligence and electrification taking the automotive sector by storm, we are committed to elevating our steering technologies for the advancement and empowerment of autonomous driving in the foreseeable future. By joining our combined resources, technology and customer bases in China, Europe, the US and South America, we look forward to capturing more market opportunities and expanding our market share globally."
Mr. Hanlin Chen, Chairman of CAAS, commented, "As a key focus of our recently formulated new five-year plan, we will leverage our advantage as a trusted steering solution provider to increase penetration into the fast-growing autonomous driving market. We will continue to expand our global footprint, develop new technologies, win more contracts and create long-term shareholder's value. This acquisition is another step in our development to become a household global auto brand."
About China Automotive Systems, Inc.
Based in Hubei Province, the People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through ten Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 6 million sets of steering gears, columns and steering hoses. Its customer base is comprised of leading auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd. in China, and Fiat Chrysler Automobiles (FCA) and Ford Motor Company in North America. For more information, please visit: http://www.caasauto.com.
Forward-Looking Statements
This press release contains statements that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. These forward-looking statements include statements regarding the qualitative and quantitative effects of the accounting errors, the periods involved, the nature of the Company's review and any anticipated conclusions of the Company or its management and other statements that are not historical facts. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. As a result, the Company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading "Risk Factors" in the Company's Form 10-K annual report filed with the Securities and Exchange Commission on March 30, 2021, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. If the outbreak of COVID-19 is not effectively and timely controlled, our business operations and financial condition may be materially and adversely affected as a result of the deteriorating market outlook for automobile sales, the slowdown in regional and national economic growth, weakened liquidity and financial condition of our customers or other factors that we cannot foresee. Any of these factors and other factors beyond our control, could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and results of operations. A prolonged disruption or any further unforeseen delay in our operations of the manufacturing, delivery and assembly process within any of our production facilities could continue to result in delays in the shipment of products to our customers, increased costs and reduced revenue. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.
For further information, please contact:
Jie Li
Chief Financial Officer
China Automotive Systems, Inc.
Email: jieli@chl.com.cn
Kevin Theiss
Awaken Advisors
+1-212-521-4050
Email: Kevin@awakenlab.com
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