Wabco Holdings said it would take full ownership of the Meritor Wabco joint venture and has signed an agreement to purchase its partyner's stakefor US$250m.

The transaction is expected to close on 1 October, 2017 and immediately prior to closing, Meritor will receive a final closing partnership distribution.  

Meritor Wabco, employing approximately 200 people, is based in Troy, Michigan, and had sales of $300m in fiscal 2016. It sells and distributes a range of Wabco's safety and efficiency technologies for commercial vehicles in North America.

"The acquisition of the remaining stake in Meritor furthers our commitment to expand our presence in North America," said Jacques Esculier, Wabco chairman and CEO. "By unifying our North America team, we can unlock further value for our customers, including offering them seamless access to our powerful technology and services portfolio, backed by the flexibility and efficiency of an integrated global supply chain."

As the commercial vehicle industry advances towards fully-autonomous vehicles, the supplier is increasingly providing vehicle intelligence and connectivity to help enable safer and more productive vehicles. With this consolidation of its business organisation and broader access to market in North America, Wabco will further strengthen its relationships with commercial vehicle manufacturers and fleets through more simplified and direct channels.

With this agreement, Wabco will take over the former joint venture's application engineering and supply chain operations, including the distribution centre and customer service hub in Hebron, Kentucky. In addition, it will continue to have exclusive access to a winter test track in Sault St. Marie, Michigan, and joint access to a year round test track in East Liberty, Ohio to support local customers. 

The agreement to take full control of the joint venture business will enable Wabco to offer its consolidated range of products and systems alongside advanced driver assistance systems (ADAS) and a full range of aerodynamic, air management and transmission automation control products in North America.

Following closure of the buyout, Wabco has agreed for Meritor to continue to be its exclusive distributor for some aftermarket products in the US and Canada, and its non-exclusive distributor in Mexico. Both parties have the option to terminate the distribution arrangements at certain points during the first three and half years, for an exercise price between $225m and $265m based on the earnings of the business.