ZF TO ACQUIRE WABCO AFTER MUTUAL SHAREHOLDER AGREEMENT

Photography by: courtesy ZF


GERMAN DRIVELINE and chassis technology company ZF has sealed a US$7 billion (A$10 billion) deal to buy US braking specialist and long-term collaborator Wabco, the pair have revealed.

ZF TO ACQUIRE WABCO AFTER MUTUAL SHAREHOLDER AGREEMENT
ZF says Wabco will expand its expertise to include commercial vehicle braking solutions for the first time.

As reported in our sister magazine ATN (www.fullyloaded.com.au) recently, ZF sees this as part of its 'Next Generation Mobility' strategy aimed at commercial vehicle, connectivity, automation and electric propulsion – a logic Wabco endorses.

"Joining forces with highly respected ZF will create a leading global technology company well positioned to capitalise on future demand for autonomous, efficient and connected commercial vehicles," Wabco chairman and CEO Jacques Esculier said.

Esculier adds that the logic of innovation presently demands increasingly more resources.

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"It has become increasingly apparent that our industry will face a new level of strategic complexity and will attract new competition, including new entrants from outside the sector, able to bring unprecedented resources to the table," he said.

"This demands Wabco make critical choices in the role it will play in the future industry value chain.

"Furthermore, it is anticipated that significant in-house investment and new alliances will be necessary to address the full scope of required technologies for these new domains.

"Considering these factors, we strongly believe this is the appropriate moment to be joining forces with ZF, providing access to critical technology and the global size and scale to de-risk the return on investment required as the industry transforms. And as a result it will realise certainty of value and liquidity for our shareholders."

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SHAREHOLDER APPROVAL

In a shareholder vote on June 27, 2019, 68.44 per cent of WABCO’s outstanding share capital voted in favour of the transaction agreed by ZF and WABCO late March, 2019, ZF states.

Under the terms of the transaction, ZF will acquire all outstanding shares of WABCO for (USD)$136.50 per share in cash, subject to regulatory approvals and other customary closing conditions.

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EXPANDED EXPERTISE

In explaining its reasoning for the deal, ZF says Wabco will expand its expertise to include commercial vehicle braking solutions for the first time.

"This plays a central role for the control of automated driving functions – including emergency braking manoeuvres…"

"Following the acquisition, customers of both companies will have a partner in ZF who can offer them a fully integrated system approach, new drive systems for e-mobility and autonomous driving functions.

"ZF expects that automated driving functions will primarily be implemented for commercial vehicles and in areas with low complexity and traffic (e.g. factory sites, airports, agriculture).

"The combination of both businesses is expected to further accelerate the development of new technologies to enable autonomous commercial vehicle functions, making ZF less dependent on the economic cycle of the passenger car industry.

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"The planned strategic acquisition of Wabco is consistent with ZF’s goal to develop and deliver technology solutions that make cars and commercial vehicles see, think and act in order to reduce emissions and increase road safety.

"While ZF already has sensor systems and computing technology for its ‘see’ and ‘think’ competence, together with Wabco ZF will in future be completing the portfolio for commercial vehicle technologies to offer solutions to allow vehicles to ‘act’.

"ZF is already a leading supplier in the area of steering and driveline technology."

The transaction is subject to regulatory approvals, closing conditions and shareholder approval with more than 50 per cent of Wabco’s outstanding shares.

ZF expects to close the transaction early next year.

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ABOUT ZF

ZF Friedrichshafen AG is a global technology company and supplies systems for passenger cars, commercial vehicles and industrial technology, enabling the next generation of mobility, it states.

With its comprehensive technology portfolio, the company offers integrated solutions for established vehicle manufacturers, mobility providers and start-up companies in the fields of transportation and mobility, it adds.

ZF continually enhances its systems in the areas of digital connectivity and automation in order to allow vehicles to see, think and act, it says.

The company has a global workforce of 149,000 with approximately 230 locations in 40 countries.

ABOUT WABCO

Wabco is the leading global supplier of braking control systems and other advanced technologies that improve the safety, efficiency and connectivity of commercial vehicles, it states.

Originating from the Westinghouse Air Brake Company founded nearly 150 years ago, Wabco is powerfully ‘Mobilising Vehicle Intelligence’ to support the increasingly autonomous, connected and electric future of the commercial vehicle industry, it says.

Today, leading truck, bus and trailer brands worldwide rely on Wabco’s differentiating technologies, it explains.

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