German automotive supplier Schaeffler has increased its offer price for shares in Vitesco Technologies, a move aimed at addressing concerns raised by investors who found the initial offer to be insufficient. The Schaeffler family, holding all voting rights and 75% of shares in the company, is pushing for a merger with Vitesco to enhance their position in the electric vehicle component market.
Revised offer price
The Schaeffler family initially proposed a share price of 91 euros, a figure criticized by some investors as being too low. Responding to this pressure, the family has 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.
Vitesco’s response
However, Vitesco’s management expressed dissatisfaction with the revised offer, deeming it “inadequate from a financial point of view.” Despite this, the management acknowledged that the new offer could serve as an exit opportunity for risk-averse or short-term investors in the current market climate. The differing perspectives between Schaeffler and Vitesco on the offer price introduce uncertainty into the merger negotiations.
Merging for competitive edge
The proposed merger between Schaeffler and Vitesco aims to create a more competitive supplier in the electric vehicle segment. Simultaneously, it serves as a strategic move to simplify the Schaeffler family’s business empire, streamlining their holdings, including stakes in Vitesco and Continental AG.
Timeline and completion
The offer period is set to expire on December 15, with any potential transaction expected to conclude in the fourth quarter of 2024. The timeline provides room for further discussions and negotiations between the involved parties, as they seek alignment on the terms and conditions of the merger.
As the automotive industry undergoes transformations, driven by the shift towards electric vehicles, strategic moves such as mergers and acquisitions become crucial for companies aiming to fortify their positions in the evolving market landscape. The outcome of the ongoing discussions between Schaeffler and Vitesco will significantly impact the trajectory of their collaboration and influence the competitive dynamics within the electric vehicle component sector.