The automotive supplier Schaeffler is reaching out to Vitesco to create an e-mobility specialist. It’s about cost savings of 600 million euros per year. The shareholders still have to approve the takeover.
The Franconian automotive supplier Schaeffler is planning to take over the drive specialist Vitesco. In return, Schaeffler is offering Vitesco shareholders 91 euros per share in cash, which corresponds to a premium of 21 percent compared to the closing price last Friday. The SDAX company announced today in Herzogenaurach that the aim is to ultimately merge the companies. It was said that Schaeffler and Vitesco had a matching technology portfolio, particularly in the area of electromobility.
Overall, Regensburg-based Vitesco, which spun off from Continental two years ago, is valued at 3.64 billion euros. Since then, the family that owns Schaeffler has held almost 50 percent of Vitesco. She has agreed to sell her shares to the AG. With the takeover, Schaeffler wants to form a specialist for electromobility.
However, the plans have not been agreed with the Vitesco board. Schaeffler is aiming for an “amicable merger,” explained CEO Klaus Rosenfeld.
The merger is intended to save costs
“The business combination will create a leading ‘motion technology company’ with four focused divisions and sales of approximately 25 billion euros,” said Schaeffler in a statement. The two companies complemented each other in electromobility. The merger of the companies is expected to bring annual cost savings of 600 million euros before interest and taxes and is expected to be realized by 2029. Schaeffler initially expects costs of up to 665 million euros.
Vitesco is currently in the process of converting from a manufacturer of parts for combustion engines to a supplier of drive technology for electric vehicles. “Schaeffler and Vitesco are stronger together. This brings significant advantages for customers, employees, shareholders and business partners,” said Rosenfeld. Together the two companies would have 120,000 employees.
“Now is the right time”
As part of the Vitesco takeover, Schaeffler AG also wants to simplify its shareholder structure. The listed preference shares are to be converted into ordinary shares, with the remaining shareholders being treated the same as the family that owns the ordinary shares.
“For my mother and me as family shareholders, giving up voting rights is a drastic step that we have carefully considered in the interests of the company,” said Supervisory Board Chairman Georg Schaeffler. “Given the significant benefits that the entire transaction brings to all stakeholders, we are convinced that now is the right time to take the next big step (…).” The family is also Continental’s largest shareholder with 46 percent. The shareholders still have to decide on this.
The Vitesco Group, which was spun off from Continental and listed on the stock exchange, increased its sales by twelve percent to 2.4 billion euros in the second quarter and doubled its earnings before interest and taxes, adjusted for special effects, to 76 million euros. The bottom line was a loss of 14 million euros.