BorgWarner Inc. (Auburn, MI) and Delphi Technologies PLC (London, UK) have entered into a definitive transaction agreement under which Borg Warner will acquire Delphi Technologies in an all-stock transaction. Delphi is valued at approximately $3.3 billion for the purposes of the transaction.
The acquisition would strengthen BorgWarner’s power electronics products, capabilities and scale. Combining with Delphi Technologies is consistent with BorgWarner’s evolution toward the propulsion market of the future, the company said in a press release, and would enable BorgWarner to maintain flexibility across combustion, hybrid and electric propulsion.
In fiscal year 2019, BorgWarner and Delphi Technologies estimate that they generated, respectively, $10.17 billion and $4.3 billion in net sales. Following the close of the transaction, 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.
The combination of the two companies is expected to strengthen BorgWarner’s power electronics products, capabilities and scale, creating a leader in electrified propulsion systems that is well-positioned to take advantage of future propulsion migration. Delphi Technologies brings industry-leading power electronics technology and talent, with an established production, supply and customer base. The combined company would offer customers a suite of integrated and stand-alone offerings of power electronics products, including high-voltage inverters, converters, on-board chargers and battery management systems, and capabilities, including software, systems integration and thermal management.
“This exciting transaction represents the next step in BorgWarner’s balanced propulsion, 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. We have a great deal of respect for Delphi Technologies’ team around the world and look forward to welcoming them to BorgWarner.”
Richard F. Dauch, CEO of Delphi Technologies, commented: “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.”
The BorgWarner/Delphi Technologies transaction is expected to close in the second half of 2020, subject to approval by Delphi Technologies’ stockholders, the satisfaction of customary closing conditions and receipt of regulatory approvals.
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