DARMSTADT, Germany—Trelleborg A.B. and Freudenberg and Co. K.G. have signed an agreement under which Trelleborg will sell its shares in joint venture TrelleborgVibracoustic to Freudenberg.
Trelleborg said the proposed transaction represents the conclusion of a prior plan for Trelleborg's exit from the joint venture.
The transaction is subject to signing a final agreement and conditional upon the approval from relevant regulatory authorities. The deal is expected to be completed in the second quarter of 2016 and would be effective Jan. 1, 2016.
“TrelleborgVibracoustic has successfully integrated two global leaders within automotive antivibration solutions, and in the process delivered significant synergies, improved its footprint and strengthened its positions over the past years,” Peter Nilsson, Trelleborg president and CEO, said in a prepared statement.
“Throughout this journey, we have enjoyed great cooperation with Freudenberg,” he added.
The transaction is based on an enterprise value of a little more than $2 billion for the joint venture. Trelleborg will receive about $7.7 billion in addition to a dividend of about $1.6 billion it received in December. That corresponds to a total value of approximately $9.3 billion.
About 10 percent of the purchase price is subject to TrelleborgVibracoustic's forecasted sales performance in 2016 and 2017, Trelleborg said.
Because of that, it said, the final value of the deal may be somewhat higher or lower than the equity value.
TrelleborgVibracoustic was established as a joint venture by Trelleborg and Freudenberg in 2012. At the time, the two parent companies agreed to use the dual brand name of TrelleborgVibracoustic for a transitional period.
Earlier this month, the firms announced its name would be changed to Vibracoustic.