French investment company Wendel, controlled by the founding family, is to sell its stake in electrical connections business Deutsch, as it attempts to reduce its €5 billion debt faster.
The sale will see the family business divest its 89% holding in US-based Deutsch, which it first acquired in June 2006, for €1.5 billion, Wendel said in a statement. The net proceeds will amount to €954 million.
Wendel’s sale follows a similar move last month, when non-family chief executive Frederic Lemoine sold the company’s 5% stake in Legrand, another group that manufactures electrical connectors.
Paris-based Wendel, which operates by investing in listed and unlisted companies, currently has debts of around €5 billion, down from more than €8 billion in 2009.
Lemoine suggested in the statement that the latest sale would allow Wendel to plan for further investments while clearing off its debt. “These are two key success factors in the current economic environment,” he said.
Descendants of Jean-Martin Wendel, who founded the company in 1704 in Lorraine, own 34.4% of the company through a holding vehicle called Wendel-Participations. The group hit headlines in January this year when it appealed a fine imposed by French regulators for providing insufficient information about its purchase of a stake in Saint-Gobain, a building materials company.
Family member Ernest-Antoine Seilliere serves as chairman of the supervisory board of Wendel, which had revenues of €5.49 billion in 2010, up from €4.67 billion the year before.