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

Square to acquire installment payment firm Afterpay for USD 29 Bn

Square to acquire installment payment firm Afterpay for USD 29 Bn

By Akshay Kedari

With the increasing competition in the buy now pay later (BNPL) arena for U.S. consumers, digital payments firm Square Inc. recently announced its plans of acquiring BNPL company Afterpay Ltd. in an all-stock deal valued at USD 29 billion. The San F...

Hyundai Motor, LG Energy Solution to launch battery plant in Indonesia

Hyundai Motor, LG Energy Solution to launch battery plant in Indonesia

By Akshay Kedari

This new battery production plant will be built in the Karwang Regency. It will reportedly have a yearly output of around 10 gigawatt-hours of batteries. South Korean multinational conglomerates Hyundai Motor Company and LG Energy Solution Ltd. ...

Amazon’s ‘Key for Business’ raises security concerns for U.S apartments

Amazon’s ‘Key for Business’ raises security concerns for U.S apartments

By Akshay Kedari

American technology and e-commerce giant, Amazon.com Inc. has reportedly been using ‘Key for Business’- a system that enables the company’s delivery agents to gain access to apartment complexes without requiring to be buzzed in by r...

Volvo Cars might take full control of its Chinese stake ahead of IPO

Volvo Cars might take full control of its Chinese stake ahead of IPO

By Akshay Kedari

Swedish luxury automobile manufacturer Volvo Cars Corporation reportedly signed an agreement with Zhejiang Geely Holding Group to buy out from their decade-long joint ventures to gain complete ownership of its facilities in China. According to relia...

Lamborghini expects sale volumes to hit record highs in India this year

Lamborghini expects sale volumes to hit record highs in India this year

By Akshay Kedari

Italian luxury sports car manufacturer, Automobili Lamborghini S.p.A. is reportedly expecting substantial growth in sales volumes in India this year as the carmaker is experiencing a V-shaped upturn in demand after the easing out of COVID-19 pandemic...