BY Richard Summerfield
US auto parts manufacturer BorgWarner has agreed to acquire UK-based Delphi Technologies in a $3.3bn deal.
The deal will see Delphi stockholders receive a fixed exchange ratio of 0.4534 shares of BorgWarner common stock per Delphi Technologies share. That translates to $17.39 per share, a premium of around 77 percent to Delphi’s closing price on Monday.
Upon closing of the transaction, current BorgWarner stockholders are expected to own approximately 84 percent of the combined company, Delphi Technologies stockholders are expected to own approximately 16 percent. The deal is expected to close in the second half of 2020, pending shareholder and regulatory approval and customary closing conditions.
“This exciting transaction represents the next step in BorgWarner’s balanced propulsion strategy, strengthening our position in electrified propulsion as well as our combustion, commercial vehicle and aftermarket businesses,” said Frédéric Lissalde, president and chief executive of BorgWarner. “Delphi Technologies will bring proven leading power electronics technologies, talent and scale that will complement our hybrid and electric vehicle propulsion offerings. As a combined company, we look forward to delivering enhanced solutions to our customers while driving increased value for our stockholders.”
“This is a compelling transaction that we are confident delivers clear benefits to our stakeholders,” said Richard F. Dauch, chief executive of Delphi Technologies. “Delphi Technologies’ portfolio is highly complementary to BorgWarner’s, and together we plan to create a pioneering propulsion technologies company uniquely equipped to serve OEMs and aftermarket customers around the world. BorgWarner’s team shares our focus on addressing today’s and tomorrow’s challenges, and the combination will create exciting opportunities for our employees. We also expect our stockholders will benefit from the opportunity to participate in the future growth and upside potential of the combined company.”
The combined company will be led by Mr Lissalde and BorgWarner chief financial officer Kevin Nowlan and will operate as BorgWarner. BorgWarner had sales of $10.17bn in fiscal 2019, while Delphi had sales of $4.36bn.
News: BorgWarner to buy Delphi Technologies in $3.3 billion auto parts deal