Schaeffler has offered to buy Vitesco Technologies Group in a EUR3.64bn ($3.8bn) deal which would bolster the German supplier and ball bearingcspecialist’s presence in the electric vehicle supply chain, according to Bloomberg.
Schaeffler - whose billionaire owners already control almost half of Vitesco - has offered EUR91 a share in cash for the company, confirming an earlier report by Bloomberg News. The company expected the transaction to boost earnings before interest and taxes by EUR600m annually by 2029.
The report noted the Schaeffler family controls suppliers Vitesco, Schaeffler and Continental and is reshaping its industrial empire as the shift toward EVs accelerates. The Schaeffler-Vitesco deal would combine the former’s mechanical presence with the latter’s capabilities in power electronics, Schaeffler chief executive officer Klaus Rosenfeld told Bloomberg.
While the news might surprise because Schaeffler has been keen to cut its exposure to autos, the deal fills a gap in the company’s e-mobility portfolio, analysts quoted by Bloomberg wrote in a note.
The combined entity will have the Schaeffler family’s holding firm as a joint shareholder and employ 120,000 people. The family, which holds 49.9% in Vitesco, has added the option to buy another 9% via derivative instruments.
The company expects to finance about EUR1.8bn of the offer, with debt levels as part of the takeover expected to start declining from next year, Rosenfeld told Bloomberg.
Schaeffler secured a financing package from Bank of America, BNP Paribas and Citigroup for the transaction and expects one-off integration costs of as much as EUR665m, Bloomberg reported. The deal is expected to be completed in the fourth quarter of next year.
Continental’s CEO recently told German newspaper Welt am Sonntag he’s open to selling businesses if it will help create value, Bloomberg noted.
The company is already considering divesting parts of ContiTech, a smaller unit that also makes car parts including drive belts and engine pulleys, the report added.
