German auto parts maker ZF buys US firm WABCO for $7bn
Frankfurt am Main (AFP)
German auto parts maker ZF Friedrichshafen said Thursday it had bought US-Belgian firm WABCO for around seven billion dollars to become the world's third biggest supplier of auto parts.
The board of directors of WABCO, which specialises in truck brakes, "gave their agreement" for the merger, which it said should be completed in 2020.
The combined company expects to yield a sales turnover of 40 billion euros ($45 billion), ZF said in a statement, having paid $136.50 per share for a total equity of around seven billion dollars.
"Together with WABCO, ZF can form the world's leading integrated systems provider for commercial vehicle technology, creating long-term value and security for its customers, employees and owners," said ZF's CEO Wolf-Henning Scheider.
WABCO generated 3.3 billion euros of revenue in 2018 and has some 16,000 employees in 40 countries, while ZF has 146,000 employees.
The merger will bring ZF up as the world's third biggest supplier of auto parts behind the two German giants Continental (44 billion euros in turnover) and Bosch (47 billion euros for its automotive branch).
It is ZF's latest big money move after paying nearly 10 billion euros in 2014 to acquire American competitor TRW Automotive.
Jacques Esculier, chairman and CEO of WABCO, said that "joining forces with highly respected ZF will create a leading global technology company well positioned to capitalise on future demand for autonomous, efficient and connected commercial vehicles".
"We have a long history of successful collaboration to develop innovative technologies with ZF."
The merger could play a key role in the future of self-driving vehicles.
The acquisition is part of ZF's mobility strategy and will expand the company's expertise to include commercial vehicle braking solutions for the first time, a central role in automated functions for self-driving vehicles.
ZF says they expect automated driving functions will primarily be used for commercial vehicles and in areas with low complexity and traffic, for example on factory sites, at airports and in agriculture.
? 2019 AFP