Automotive supplier BorgWarner Inc. has acquired Delphi Technologies in an all-stock transaction that values U.K.-based Delphi at approximately US$3.3 billion.
Auburn Hills, Mich.-based BorgWarner says the deal will strengthen its power electronics products and capabilities. The deal signals BorgWarner’s evolution towards the propulsion market of the future and will help the firm maintain flexibility across its combustion, hybrid, and electric propulsion (C-H-E) market segments.
The deal, which has been approved by the boards of directors of both companies, will leave current BorgWarner stockholders with approximately 84 per cent of the combined company, while current Delphi Technologies stockholders are expected to own approximately 16 per cent.
In fiscal year 2019, BorgWarner and Delphi Technologies—which was spun-off from General Motors about 20 years ago—estimated $10.17 billion and $4.36 billion of net sales, respectively. In a release, BorgWarner says the combined company is expected to be one of the leading pure-play propulsion companies globally, serving light and commercial vehicle manufacturers and the aftermarket with propulsion products and systems across combustion, hybrid and electric, resulting in greater content-per-vehicle.
“This exciting transaction represents the next step in BorgWarner’s balanced propulsion strategy, strengthening our position in electrified propulsion as well as our combustion, commercial vehicle and aftermarket businesses,” said Frédéric Lissalde, President and CEO of BorgWarner.
“Delphi Technologies will bring proven leading power electronics technologies, talent and scale that will complement our hybrid and electric vehicle propulsion offerings. As a combined company, we look forward to delivering enhanced solutions to our customers while driving increased value for our stockholders,” he said.
“This is a compelling transaction that we are confident delivers clear benefits to our stakeholders,” said Richard F. Dauch, CEO of Delphi Technologies. “Delphi Technologies’ portfolio is highly complementary to BorgWarner’s, and together we plan to create a pioneering propulsion technologies company uniquely equipped to serve OEMs and aftermarket customers around the world.”