BorgWarner plans to acquire Delphi Technologies for USD 3.3 billion
By Akshay Kedari  Date: 2020-01-30

BorgWarner plans to acquire Delphi Technologies for USD 3.3 billion

The auto-parts giant intends to gain edge in electric cars leadership with the strategic buyout

BorgWarner, a leading US-based automotive industry components and parts supplier plans to acquire Delphi Technologies for USD 3.3 billion in an all-stock deal, in a bid to gain leadership in propulsion systems for electric cars. Delphi Technologies is a provider of automotive parts and equipment.

The Delphi Technologies-BorgWarner deal is expected to consolidate BorgWarner's power electronics business. Apparently, BorgWarner has also announced a USD 1 billion stock buyback.

Frederic Lissalde, Chief Executive Officer of BorgWarner was reportedly quoted saying that the recent transaction represents a next big step in the balanced propulsion strategy of the automotive components & parts supplier company, which is likely to strengthen its position in electrified propulsion, as well as combustion, aftermarket, and commercial vehicle businesses.

As per sources close to the matter, shareholders of Delphi will receive 0.4534 share of BorgWarner’s stock for each Delphi stock owned. BorgWarner will be paying around USD 1.5 billion for Delphi. Along with the assumption of debt, the transaction is worth around USD 3.3 billion. On closing of the deal, BorgWarner stockholders would own around 84% of the combined company, while the rest will be owned by Delphi Technologies stockholders.

If the deal wins consent, it is expected to close by the second half of 2020.  Also, it will be ‘meaningfully accretive’ to adjusted earning per years (EPS) in the second full year after closing and to deliver USD 125 million in cost synergies by 2023.

The deal comes on the heels of car demand slowing down while global automakers have invested USD 225 billion to develop electric cars by 2023 in the midst of tougher fuel-efficiency regulations. This is in addition to USD 61 billion being spent on self-driving cars, according to business experts.

Source Credit: https://www.investors.com/news/delphi-stock-pops-borgwarner-megadeal-seeks-electric-cars-lead/

About Author

Akshay Kedari    

Akshay Kedari

A qualified computer engineering graduate, Akshay Kedari takes pride in having his way with words. Following his passion for content creation, he writes insightful pieces on aeresearch.net and a few other portals. Also endorsed with a short-term experience in web deve...

Read More

More News By Akshay Kedari

Innovaccer unveils AI-enabled patient relationship management solution
Innovaccer unveils AI-enabled patient relationship management solution
By Akshay Kedari

Innovaccer, Inc., a healthcare company, has recently launched an AI (artificial intelligence) enabled patient relationship management solution. The new solution will streamline communication between the care teams and patients. In addition, the solu...

Geely Tech to rollout a smart battery swapping network across Jinan
Geely Tech to rollout a smart battery swapping network across Jinan
By Akshay Kedari

Geely Technology Group, a Chinese automobile manufacturer, and the Municipal Government of Jinan, China, have reportedly signed an all-round strategic cooperation deal to jointly develop a network of smart battery swapping service stations across Jin...

CStone Pharmaceuticals, Pfizer finalize a $200 million share sale deal
CStone Pharmaceuticals, Pfizer finalize a $200 million share sale deal
By Akshay Kedari

Chinese biotechnology company, CStone Pharmaceuticals has recently announced that it has completed the Share Subscription Agreement with Pfizer Inc. for its newly issued shares worth US$200 million. The move furthers the biotech’s multifaceted ...

Researchers bag $6Mn grant to study the link between Parkinson’s & aging
Researchers bag $6Mn grant to study the link between Parkinson’s & aging
By Akshay Kedari

A three-year grant worth $6 million, funded by the Michael J. Fox Foundation, was recently awarded to a collaborative research team from Michigan’s Van Andel Institute (VAI) and the University of Minnesota Medical School. The grant was given th...

EY announces availability of OpsChain Network Procurement solution
EY announces availability of OpsChain Network Procurement solution
By Akshay Kedari

Ernst & Young (EY), a global professional services network, has recently announced the availability of a first-of-its-kind OpsChain Network Procurement solution. The solution has been built on the company’s OpsChain platform. It will enabl...