TRW Automotive Holdings, in a supply chain megadeal that has been in the works since mid-July, said Sept. 15 it has agreed to be acquired by German supplier ZF Friedrichshafen AG for $13.5 billion in cash.
The transaction, for $105.60 per share, will create the world's second-largest auto supplier with pro forma combined revenue of about 30 billion euros ($41 billion) and 138,000 employees TRW and ZF said.
TRW's equity is being valued at about $12.4 billion based on shares outstanding, company officials said, and the company's total enterprise value is being set at $13.5 billion, which includes assumption of debt.
The transaction gives ZF access to TRW's technology — from air bags to collision sensors — that keeps drivers secure and helps them avoid crashes. Consumer demand and government regulations are spreading the adoption of such features to prevent accidents and protect passengers and pedestrians.
Both companies have plastics operations, but neither is known primarily for it. ZF has been developing composite parts for suspension systems, while TRW has plastics for seat belt and air bag components.
The deal is expected to close during the first quarter of 2015, ZF CEO Stefan Sommer said today.
"The combined company will be well positioned to capitalize on favorable megatrends in the automotive industry by bringing together complementary product offerings and leading technology positions that serve high-growth areas such as fuel efficiency, increased safety requirements, and autonomous driving," the statement said.
ZF has said TRW will be operated as a separate business division within ZF, the statement said.
"We have long respected ZF as a very successful company in our industry with similar values and focus on innovation," TRW CEO John Plant said in a statement. "This transaction provides significant benefits for our shareholders who will receive full and certain value for their shares, as well as for our employees, customers and communities, all of which will reap the benefits of being part of a larger, more diversified global organization."