FSI Fund takes a 2.35% stake in Valeo

The French strategic investment fund, launched last October by President Sarkozy, has invested EUR19m in Valeo, the world's largest supplier of car parts, for a 2.35% stake. The new investment means CDC, which controls the fund, now has an 8.33% stake in the company.

Valeo has been suffering in the automotive downturn, along with its clients, and has been under growing pressure from US-based activist investor Pardus, which owns 19.75%. Although Pardus has stated it has no intention of taking over the company and signed restrictions, the potential of a merger with Visteon, a US-based car parts supplier in which Pardus has a stake, has become increasingly disconcerting to Valeo. Visteon, for its part, is in no better shape in the downturn and may soon breach its debt agreements.

This is the fund's second investment after an injection into Daher, an aeronautics supplier.

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