China Automotive Systems (CAAS) Purchases 40% of European Vehicle Technology Leader and Officially Enters Autonomous Driving
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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 all 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."
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