(Bloomberg) -- Cie. de Saint-Gobain is exploring a potential sale of its auto glass unit that could fetch as much as €2.5 billion ($2.6 billion), people with knowledge of the matter said.
The French building materials producer is working with advisers as it studies a possible divestment, the people said. It has reached out to potential suitors to gauge their interest in the business, according to the people, who asked not to be identified because the information is private.
The unit could attract interest from private equity firms, particularly those that have previously done deals in the auto glass industry, the people said. Apollo Global Management Inc., Bain Capital, Lone Star Funds and Platinum Equity are among potential bidders that may be approached, the people said.
Considerations are at an early stage, and St. Gobain could still decide against proceeding with a deal, the people said. Representatives for St. Gobain, Bain and Platinum declined to comment. Spokespeople for Apollo and Lone Star didn’t immediately respond to queries.
A sale could prove difficult amid the current bleak environment in the automotive industry. Auto suppliers have come under pressure as vehicle sales growth has slowed and the emergence of Chinese carmakers led by BYD Co. has rendered an already crowded industry even more competitive.
St. Gobain’s auto glass operations include Sekurit, which makes glazing systems for top car brands including Ford Motor Co., Honda Motor Co., Hyundai Motor Co., Mercedes-Benz Group AG and Porsche AG. That business has a listed Indian unit, St-Gobain Sekurit India Ltd., with a market value of about $127 million. St. Gobain also runs the Glassdrive network of service centers for windshield repair.
The bulk of Sekurit’s operations are in Europe, where manufacturers including Volkswagen AG to Stellantis NV have issued profit warnings in recent months. Sekurit has a relatively limited presence in the lucrative North American market, where President-elect Donald Trump has pledged to raise tariffs on imported goods.
St. Gobain co-developed the opacifying glass roof for some of Renault SA’s new models that includes special coating to protect passengers from temperature variations. The roof is made using nearly 50% recycled glass from scraps that come from automotive glass production.
--With assistance from Aaron Kirchfeld, Albertina Torsoli, Craig Trudell and Swetha Gopinath.
(Updates with potential bidders in third paragraph)
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