German auto parts maker ZF Friedrichshafen to buy US rival Wabco for $7bn
German auto parts maker ZF Friedrichshafen has agreed to buy US rival Wabco for $7bn
WABCO HLDGS
2,268.02
00:00 04/10/18
Under the terms of the agreement, ZF will pay $136.50 a share in cash, which represents a 13% premium to the closing price of Wabco on 26 February, which was the last day before media reports and Wabco's confirmation of an approach by ZF.
ZF said the acquisition is part of its Next Generation Mobility strategy and will expand the company’s expertise to include commercial vehicle braking solutions for the first time.
ZF chief executive officer Wolf-Henning Scheider said: "We believe that, together with Wabco, ZF can form the world’s leading integrated systems provider for commercial vehicle technology, creating long-term value and security for its customers, employees and owners.
"For ZF the acquisition of a specialist and leader for commercial vehicle braking systems means adding a stable and growing business segment and enables our existing commercial vehicle division to expand its expertise in vehicle dynamics control. This will create the foundation for ZF to offer comprehensive systems for safe and automated mobility solutions for passengers and goods to our customers."
Wabco's chairman and CEO, Jacques Esculier, said: "Joining forces with highly respected ZF will create a leading global technology company well positioned to capitalise on future demand for autonomous, efficient and connected commercial vehicles.
"We have a long history of successful collaboration to develop innovative technologies with ZF with both companies sharing an uncompromising drive for excellence, passion for innovation, and exceptional customer focus."
The deal, which has been unanimously approved by Wabco's board of directors and ZF's management and supervisory board, is expected to close early next year.
RBC Capital Markets analyst Seth Weber said: "While the acquisition price (6.5% discount to WBC’s current share price) is likely to be viewed as disappointing/cause clamouring for a higher bid, we also believe WBC has been viewed as an attractive asset for some time, and we see the list of realistic potential bidders as relatively small."
At 1337 GMT, Wabco shares were down 10% at $131.37.