Offering a cash bid of EUR91 per share, Schaeffler aims to acquire all shares of Vitesco Technologies Group, valuing the company at €3.64 billion.
Schaeffler, one of Germany’s largest auto suppliers, has made a strategic move to merge with Vitesco Technologies Group by offering a cash bid of EUR91 per share. This deal represents an estimated value of €3.64 billion and is the first step in a planned three-step process towards an eventual merger.
The Path Towards Merger
Both Schaeffler and Vitesco Technologies Group are currently under the control of IHO Holding. Schaeffler’s offer to acquire Vitesco’s shares is contingent upon approval and coordination with IHO Holding. Once this initial transaction is completed, it would pave the way for discussions on a friendly business combination between the two companies.
Implications of the Merger
Upon successful completion of the merger, a new group would be formed with a combined annual sales figure of approximately EUR25 billion. This consolidation of resources and expertise promises significant benefits for both Schaeffler and Vitesco Technologies Group.
Response and Financing
Vitesco Technologies Group has not yet responded to Schaeffler’s offer. However, Schaeffler has secured an agreement with IHO Holding that prevents them from accepting any other offers or selling their Vitesco shares until a specified date. Additionally, Schaeffler has prepared a comprehensive financing package to ensure the successful execution of this acquisition.
Schaeffler’s proactive approach in pursuing a merger with Vitesco Technologies Group demonstrates their commitment to growth and market consolidation. If this deal goes through, it will create a powerful entity within the automotive industry, solidifying Schaeffler’s position as a key player in the market.
Schaeffler Announces Tender Offer to Vitesco Shareholders
Schaeffler, a global automotive and industrial supplier, has unveiled its tender offer to shareholders of Vitesco Technologies. The offer will not have a minimum acceptance threshold and is expected to be available until mid-December.
Conversion of Nonvoting Shares for Improved Voting Rights
Upon completion of the tender offer, Schaeffler intends to convert its nonvoting shares into common shares, granting them full voting rights. This conversion paves the way for shareholders of both companies to vote on the merger and establish the ownership ratio.
Projected Timeline and Benefits
Schaeffler anticipates finalizing the entire transaction in the fourth quarter of 2024. The merger between the two industry-leading companies holds immense strategic value. Combining their complementary technology portfolios will enhance competitiveness, especially in the realm of electrification.
Revenue and Synergy Potential
With this merger, Schaeffler envisions an opportunity to generate around EUR600 million in annual revenue and cost synergies at the earnings-before-interest-and-taxes level. These synergies are targeted to be fully realized by 2029. However, the integration process is likely to incur one-off costs estimated to reach up to EUR665 million.