ZF Acquires TRW Auto for $13.5 Billion

Published By : 16 Sep 2014 | Published By : QYRESEARCH

A deal valued at $13.5 billion has been reached between ZF Friedrichshafen, the German car parts maker and the American TRW Automotive Holdings Corp. The deal includes debt and makes the parent company an automotive supply giant with a total annual sales figure of more than $40 billion.

A ZF spokesperson said the deal amounts to more than twice of the company’s sales in its two largest car markets of the U.S. and China. It also makes ZF a major supplier of safety products including air bags and brakes, along with an already large share in powertrains and steering systems sales.

The outstanding shares for TRW Auto rise to almost $12 billion if ZF follows through on offering $105.60 per share in cash. It amounts to a premium of 16 percent above TRW’s closing price on the 9th of July, just before ZF’s announcement of buying out TRW.

ZF announced on Monday that it had sold off its steering unit to Robert Bosch GmbH in an effort to dismiss antitrust issues and be a part of the broader combination with TRW.

The price of $105.60 per share will represent a multiple of 7.6 times the earnings of TRW before tax, interest, depreciation and amortization for the year that ended on June 2014. That makes it one of the costliest takeovers in the auto parts industry.

TRW is based in Livonia, Michigan, and is a global manufacturer and supplier of air bags, steering and braking equipment for cars. Its sales portfolio includes names such as Ford Motor Co and General Motors Co.
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