German automotive supplier Schaeffler and Vitesco Technologies have entered into a Business Combination Agreement to create a leading Motion Technology Company. The move is aimed at solidifying former’s position in the electric vehicle component market. Under the agreement, the combined company will be named Schaeffler AG. It will consist of four focused divisions with the E-Mobility Division combining the expertise of both the companies. This division will be headed by Thomas Stierle, who currently leads Vitesco’s Electrification division.
Key points of the agreement
Vitesco has agreed to constructively support the overall transaction including the ongoing public tender offer by Schaeffler and the subsequent merger of the two automotive suppliers. The company’s headquarters will be located in Herzogenaurach while the allocation of the divisional headquarters will be further discussed between the parties
The terms of employment of the employees of Vitesco Technologies, in particular their remuneration or entitlement to other employer benefits, will not change in the combined company. Furthermore, both the companies have agreed on common principles for filling leadership positions below the Executive Board for the E-Mobility and Powertrain & Chassis divisions as well as for central functional areas in the combined company.
The combined company will offer a complete range of products, particularly in the area of electrification, to leverage the accelerated growth potential of e-mobility. It aims to have annual Pro-forma sales of around 25 billion euros and employ more than 120,000 people.
Revised offer
Schaeffler had initially proposed a price of 91 euros per share but it was criticized by some investors for being too low. Responding to this pressure, the company revised the offer to 94 euros per share in Vitesco. This adjustment, highlighting confidence in potential synergies, is part of the broader strategy to consolidate their presence in the electric vehicle sector. After showing initial resistance on the voluntary public tender offer of Schaeffler dated 15 November 2023, the Vitesco management agreed for the merger.