Niterra (TYO:5334) has withdrawn the automotive components business of its U.S. subsidiaries, Wells Vehicle Electronics Holdings and Wells Vehicle Electronics LP, according to a Friday release.
The move stemmed from a continued weakening in the segment's performance amid heightened market challenges.
With the withdrawal, Niterra agreed to transfer Wells Vehicles Electronics' repair parts segment to Wells Vehicle Electronics AEM, a subsidiary created by Omega Acquisition specifically for the acquisition.
The parties did not disclose the transfer's price and terms.
Niterra sees a loss of about 15 billion yen in operating expenses from the business transfer and as provisions linked to the withdrawal from its automotive components business.
However, the company expects a decline in corporate income taxes from the tax-deductible
losses from the Wells subsidiaries' liquidation.
The positive tax impact should exceed the operating expenses associated with the withdrawal, leading to an estimated rise of about 3 billion yen in profit for the current fiscal year.