Schaeffler AG declined after offering to buy out electric-vehicle and combustion-car component maker Vitesco Technologies Group AG in a €3.64 billion ($3.8 billion) deal.
(Bloomberg) — Schaeffler AG declined after offering to buy out electric-vehicle and combustion-car component maker Vitesco Technologies Group AG in a €3.64 billion ($3.8 billion) deal.
The German ball-bearings maker offered €91 a share in cash, it said Monday, confirming an earlier report by Bloomberg News. Holding companies controlled by the billionaire Schaeffler family already own 49.9% of Vitesco, which was spun off from Continental AG in 2021, the automotive supplier also backed by the industrialist family.
Vitesco jumped as much as 20% to €90.50 in Frankfurt. Schaeffler fell as much as 9.8%, the most since August 2020.
The deal, subject to shareholder approval and expected to complete in the fourth quarter of next year, will help the billionaire family reshape their industrial empire, expanding Schaeffler’s offerings for the electric vehicles industry. The combined company will employ more than 120,000 people.
Schaeffler secured a financing package from Bank of America, BNP Paribas and Citigroup for the transaction. The company expects a one-off integration cost of as much as €665 million, and €600 million annually in additional earnings, to be fully reached in 2029. Schaeffler had about €628 million in annual free cash flow at the end of June, according to data compiled by Bloomberg.
Continental’s chief executive officer recently told German newspaper Welt am Sonntag that he’s open to selling businesses if it will help create value. The company is already considering divesting parts of ContiTech, a smaller unit that also makes car parts including drive belts and engine pulleys.
–With assistance from Christoph Rauwald.
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