WABCO to be Acquired by ZF Friedrichshafen for $136.50 per Share in Cash

  • Transaction brings together two leaders with highly complementary and innovative technology offerings to address future demand for advanced mobility in the area of commercial vehicles
  • All-cash transaction at a premium to undisturbed price offers certainty of value and liquidity for WABCO shareholders

BERN, Switzerland, March 28, 2019WABCO Holdings Inc., a leading global supplier of technologies and services that improve the safety, efficiency and connectivity of commercial vehicles, today announced that it has entered into a definitive merger agreement with ZF Friedrichshafen AG (“ZF”), a privately held global leader in driveline and chassis technologies.

Under the agreement, ZF will acquire all outstanding shares of WABCO for $136.50 per share in an all-cash transaction for an equity value of over $7 billion. The acquisition price represents a 13 percent premium to the closing stock price of $120.75 on February 26, 2019, the date prior to media reports and WABCO’s confirmation that ZF had approached the company. The transaction also represents a premium of approximately 18 percent and 23 percent to the undisturbed Volume Weighted Average Price (VWAP) for the 30 and 90 days ended February 26, 2019, respectively.

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The transaction will bring together two global technology leaders serving OEMs and fleets in the automotive and commercial vehicle industry, combining WABCO’s capabilities in commercial vehicle safety and efficiency, including technologies involved in vehicle dynamics control, active air suspension systems, and fleet management systems with ZF’s leading position in driveline and chassis technologies for cars and commercial vehicles.

Jacques Esculier, Chairman and CEO of WABCO, said: “This is the right combination at the right price at the right time for WABCO. We have a history of successful collaboration with ZF, including prototyping industry-first technologies, and the strategic fit between our two companies is compelling. After a thorough review, we are very pleased to announce a definitive agreement that we believe is in the best interest of WABCO shareholders.”

Mr. Esculier continued: “We are proud of WABCO’s track record since becoming a stand-alone public company nearly twelve years ago, and we believe our early anticipation of industry dynamics and ongoing ability to innovate technology ahead of others are key contributors to our sustained differentiation and success. We are therefore highly attuned to long-range competitive forces and their potential implications as the sector contemplates a future of autonomous, electric and connected vehicles.”

“We see great opportunities ahead, but they will be more challenging to realize,” Mr. Esculier added. “It has become increasingly apparent that our industry will face a new level of strategic complexity and will attract new competition, including new entrants from outside the sector, able to bring unprecedented resources to the table. This demands WABCO make critical choices in the role it will play in the future industry value chain. Furthermore, it is anticipated that significant in house investment and new alliances will be necessary to address the full scope of required technologies for these new domains.

“Considering these factors, we strongly believe this is the appropriate moment to be joining forces with ZF, providing access to critical technology and the global size and scale to de-risk the return on investment required as the industry transforms. And as a result it will realize certainty of value and liquidity for our shareholders,” Mr. Esculier concluded.

The transaction, which has been unanimously approved by WABCO’s Board of Directors, is expected to close in early 2020. It is subject to approval by WABCO’s shareholders, customary closing conditions, and regulatory approvals.

For further information regarding all terms and conditions contained in the definitive merger agreement, please refer to WABCO’s Form 8-K, which will be filed with the Securities and Exchange Commission in connection with this transaction.

Goldman Sachs International is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom is acting as legal advisor to WABCO.

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