Surprise for bosses
Automotive supplier Schaeffler wants to buy Vitesco
October 9, 2023, 8:47 a.m
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With the takeover of Vitesco, the automotive supplier Schaeffler wants to form a leading company for e-mobility. The merger is expected to bring annual savings of 600 million euros. But the drive specialist’s board of directors is not involved in the merger plans.
The Franconian automotive supplier Schaeffler is reaching out to the drive specialist Vitesco. Schaeffler AG is offering 91 euros per Vitesco share, 21 percent more than the closing price on Friday, the company announced in Herzogenaurach this morning. Overall, Regensburg-based Vitesco, which spun off from Continental two years ago, is valued at 3.64 billion euros. However, the plans have not been agreed with the Vitesco board. Schaeffler is aiming for an “amicable merger,” explained CEO Klaus Rosenfeld.
The owner family Schaeffler has already held almost 50 percent of Vitesco since the spin-off. She has agreed to initially retain her shares in Schaeffler AG. Vitesco shares have increased by 56 percent in the past twelve months. The Regensburg company was initially not available for comment.
“Schaeffler and Vitesco are stronger together”
“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. “This includes a first-class e-mobility provider with significant growth potential,” said Rosenfeld to Vitesco shareholders. Vitesco is currently converting from a manufacturer of parts for combustion engines to a supplier of drive technology for electric cars.
“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.
By 2029, the collaboration would result in synergies that could improve the operating result (EBIT) by up to 600 million euros. The first positive effects on profits can be expected as early as 2026. Schaeffler initially expects costs of up to 665 million euros. The purchase is being financed through bridge loans from Bank of America, Citi and BNP Paribas.
Schaeffler is abolishing preferred shares
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, and the remaining shareholders will thus be equated with the family that currently holds all 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. Vitesco’s second largest shareholder is the Austrian entrepreneur Siegfried Wolf with five percent.