BorgWarner in the US is to acquire London-based Tier One automotive supplier Delphi Technologies in an all-stock transaction that values Delphi at $3.3bn.
The acquisition would strengthen BorgWarner’s power electronics products, capabilities and scale and enable BorgWarner to maintain flexibility across combustion, hybrid, and electric propulsion (C-H-E). Delphi, the Tier One supplier for Gernal Motors alongside partner company Aptiv, has been leading on the development of inverters using silicon carbide (SiC) switches and battery power packs, as well as wireless charging.
BorgWarner and Delphi Technologies generated $10.17 billion and $4.36 billion of net sales respectively in 2019 and 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.
“This exciting transaction represents the next step in BorgWarner’s balanced propulsion strategy, strengthening our position in electrified propulsion as well as our combustion, commercial vehicle and aftermarket businesses,” said Frédéric Lissalde, President and CEO of BorgWarner, who will be CEO of the enlarged company. “Delphi Technologies will bring proven leading power electronics technologies, talent and scale that will complement our hybrid and electric vehicle propulsion offerings. As a combined company, we look forward to delivering enhanced solutions to our customers while driving increased value for our stockholders.”
“This is a compelling transaction that we are confident delivers clear benefits to our stakeholders,” said Richard Dauch, CEO of Delphi Technologies. “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. BorgWarner’s team shares our focus on addressing today’s and tomorrow’s challenges, and the combination will create exciting opportunities for our employees. We also expect our stockholders will benefit from the opportunity to participate in the future growth and upside potential of the combined company.”
The boost to BorgWarner’s power electronics products creates a key player in electrified propulsion systems that aims 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 with high voltage inverters, converters, on-board chargers and battery management systems and capabilitites in software, systems integration and thermal management.
BorgWarner expects to see savings of $125m by 2023 in addition to the existing cost reduction plans of the two companies.
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