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     aeresearch.net

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

McDonald’s to leave Russia after 30 years amidst Ukraine’s invasion

McDonald’s to leave Russia after 30 years amidst Ukraine’s invasion

By Akshay Kedari

After Ukraine’s invasion, multinational fast-food giant McDonald's Corp. is reportedly planning to sell all its restaurants in Russia, pulling operations from the nation after 30 years. The world's biggest fast-food chain closed 847 ...

Berlin’s GetHenry bags USD 17.4 Mn seed funding for business expansion

Berlin’s GetHenry bags USD 17.4 Mn seed funding for business expansion

By Akshay Kedari

GetHenry, a Berlin-based company that offers couriers and logistics organizations electric last-mile delivery bikes, has reportedly raised USD 17.4 million seed round to grow its operations across Europe. The latest investment round was led by LocalG...

Ferrari to equip the upcoming Purosangue with its trademark V12 engine

Ferrari to equip the upcoming Purosangue with its trademark V12 engine

By Akshay Kedari

Italian luxury sports car manufacturer Ferrari S.p.A. will equip its much-awaited Purosangue SUV with a 12-cylinder engine, as it focused more on fuel-efficient models. Confirming the news, Ferrari Chief Executive Benedetto Vigna claimed that the com...

White House to spend USD 3 billion on EV battery manufacturing in U.S.

White House to spend USD 3 billion on EV battery manufacturing in U.S.

By Akshay Kedari

According to reliable sources, the Biden administration is planning to provide USD 3 billion in finance to reinforce EV battery manufacturing capabilities in the United States. The apparent funds will be issued by the Department of Energy from Presid...

Telefonica eyeing Israel’s high-tech sector to improve its portfolio

Telefonica eyeing Israel’s high-tech sector to improve its portfolio

By Akshay Kedari

Telefonica S.A. is planning to increase its investments in Israel’s high-tech sector this year, a senior official reported recently. The company, which is Europe’s third-largest telecommunications company, is also eyeing the country&rsquo...