Schaeffler in 3.64 billion euro bid to buy Vitesco Technologies, create EV solutions giant
With global demand for EVs accelerating, Schaeffler sets out to buy Vitesco Technologies; believes the combined company will be able to offer best-in-class solutions in e-mobility and also benefit from significant synergy potential.
German motion technology and ball bearings major Schaeffler has launched a public tender offer, estimated at 3.64 billion euros, for the Vitesco Technologies Group AG in an effort to create a leading motion technology company with four focused divisions. This includes a combined division E-Mobility with significant growth potential.
The Regensburg-based Vitesco Technologies, which has about 38,000 employees at around 50 locations worldwide, clocked revenue of 9.07 billion euros in CY2022 and is currently a driving force in electric vehicle components along with its existing ICE parts business.
Schaeffler states that it is “convinced that the combination with Vitesco will significantly improve competitiveness. Especially in the fields of electrification, Schaeffler and Vitesco have highly complementary technology portfolios, allowing the combined company to offer best-in-class solutions across all dimensions, leveraging the accelerating growth opportunities in e-mobility. Schaeffler and Vitesco will also be able to optimize profitability in conventional powertrain technologies, which will retain an attractive margin and cash profile, as well as in chassis and the Automotive Aftermarket business.”
Schaeffler plans to create four focused “pure-play” divisions with leading positions in their respective end markets:
- The E-Mobility Division will combine the highly complementary assets and capabilities of Schaeffler and Vitesco with the ambition to create a market leader in e-mobility with a pro-forma combined orderbook of around 40 billion euros and high growth potential reaching solid profitability in the medium term.
- The Powertrain & Chassis Division will include both partners’ mature businesses and will be a market leader in conventional powertrain plus chassis.
- The Vehicle Lifetime Solutions Division will combine Vitesco’s Automotive Aftermarket activities with Schaeffler’s existing aftermarket platform, creating an integrated platform player.
- The Bearings & Industrial Solutions Division will consist of Schaeffler’s current Industrial Division and its Automotive Bearings business, with the ambition to build the leading global Bearings & Industrial Solutions company operating in four market clusters.
Klaus Rosenfeld, CEO of Schaeffler AG, said: “With the launch of the tender offer today, we are initiating a transformative move for Schaeffler. By combining Schaeffler and Vitesco, we will build a leading Motion Technology Company with four focused ‘pure-play’ divisions, a balanced well-diversified portfolio, and critical scale across its businesses. This includes a best-in-class e-mobility champion with significant growth potential. The combination will make Schaeffler and Vitesco stronger together and is beneficial for customers, employees, shareholders and business partners.”
Vitesco, whose aim is to develop innovative, efficient electrification technologies for all types of vehicles, has a large EV portfolio including 48-volt electrification solutions, electric drives, and power electronics for hybrid and battery-electric vehicles.
POTENTIAL FOR SIGNIFICANT SYNERGIES
The Schaeffler and Vitesco combination offers significant synergy potential with an envisaged EBIT impact of 600 million euros annually to be fully reached in 2029, with one-off integration costs of up to 665 million euros.
Based on annual 2022 figures, post-merger Schaeffler will have annual pro-forma sales of around 25 billion euros and a well-balanced divisional and regional mix. The combined company will employ more than 120,000 people with 44 R&D centres and more than 100 production sites, situated in all major regions worldwide.
Schaeffler and Vitesco make a good match not only in terms of technology, but also culturally. Both companies share a technology and innovation-driven mindset, focus strongly on sustainability, are headquartered in Bavaria, and have IHO Holding as joint shareholder.
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