LIVONIA, Mich.—ZF Friedrichshafen A.G. plans to acquire TRW Automotive Holdings Corp. in an all-cash transaction valued at about $13.5 billion on an enterprise value basis.
The transaction will create a global automotive supplier business with pro forma combined sales of about $41 billion and 138,000 employees. ZF said Livonia-based TRW will operate as a separate business division within ZF.
The acquisition price represents a premium of about 16 percent as well as 15 percent over TRW's undisturbed closing stock price of $91.40 on July 9, 2014, and all-time undisturbed high price of $91.62 on July 7, 2014, respectively, and a 7.6x multiple of TRW's adjusted EBITDA for the 12 months ended June 27, 2014, according to the companies.
The agreement has been unanimously approved by TRW's board of directors and ZF's supervisory board and management board.
“The acquisition of TRW fits perfectly into our long-term strategy,” ZF CEO Stefan Sommer said. “The transaction combines two highly successful companies that have remarkable track records of innovation and growth and solid financial positions. We are strengthening our future prospects by enlarging our product portfolio with acknowledged technologies in the most attractive segments.”
TRW products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services.
ZF manufactures driveline and chassis products, with 122 production companies in 26 countries.
“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,” said John C. Plant, chairman and CEO of TRW.