Industrial giant Cummins (NYSE:CMI)–which specializes in diesel and alternative fuel engines–has completed the acquisition of two Faurecia (OTHEROTC:FURCF) commercial vehicle plants through its subsidiary Cummins Emission Solutions. The two plants are located in Columbus, Indiana (U.S.) and Roermond, Netherlands.
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According to details of the announcement, the acquisition cost Cummins a total of $199.2 million, which the company paid for in cash. In a statement, Cary Chenanda, Vice President of Cummins Emission Solutions, said the recent acquisition is a follow-up to an earlier commitment in May to acquire part of Faurecia’s business.
The company said the acquisition will help it meet the global demand for low-emission products. When commenting on what is to become of the current Faurecia staff, the firm said it will retain the employees working in the acquired manufacturing facilities.
Furthermore, Cummins will honor Faurecia’s existing contracts in both facilities. The company assured it will pour investments into the plants to ensure it delivers on the contract. Outside of the U.S., Faurecia remains a supplier to Cummins in India, China, South Africa, and South America.
Is Cummins a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Cummins stock based on three Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Nevertheless, the average price target of $264.79 per share implies 17.68% upside potential.
