On the 28th of November, Schaeffler and Vitesco entered into a business combination agreement concluding their planned merger. Schaeffler increased its tender offer to Vitesco shareholders from EUR91 to EUR94 (USD99-103) per share, the acceptance period for the offer expires on 15th of December 2023. Additionally, decisions regarding a combined management board have also been made. This follows Schaeffler’s original offer to purchase all of Vitesco’s outstanding shares in October.

A Joint Motion Technology Company

By joining forces, the pair will combine their capabilities to create a “Motion Technology Company” with four “pure-play” divisions. The merged company will offer a complete range of products, focused on electrification, aiming to accelerate growth in the e-mobility sector. The company will employ circa 120,000 people and is expected to have annual sales amounting to EUR25 billion (USD27.4 billion). Schaeffler anticipates the merger will offer significant potential in the form of a predicted annual EBIT of EUR600 million (USD658 million), by 2029.

Schaeffler’s CEO, Klaus Rosenfeld, said, “We are fully convinced that both companies ideally complement each other and will thus be stronger together.” Continuing, “We are pleased that, after intense and, in part, for both sides challenging discussions, we came to a business combination agreement, which now lays the ground for a swift and effective integration.”

A Combined Board and Integration Committee

The integration process will be managed by an integration committee with equal representation. Consisting of six members, the committee will include respective CEOs, CFOs and CHROs of both companies. The first meeting of the committee will occur before the end of 2023, with both parties preparing a joint business plan by mid-2024. Additionally, the pair have agreed on a nine-member management board. The board will be led by Schaeffler’s CEO, and will include four functional leaders CFO, CHRO, CTO and COO as well as the four divisional CEOs of the newly formed divisions. Schaeffler and Vitesco have agree that the E-Mobility division will be headed by Thomas Stierle, the current head of Vitesco’s Electrification division.

Rho’s Evaluation

When it first emerged that Schaeffler…

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Image credit: Adobe Stock

Sources: Schaeffler AG