BorgWarner: Acquisition of Delphi Technologies

BorgWarner Inc. and Delphi Technologies PLC have entered into a definitive transaction agreement under which BorgWarner will acquire Delphi Technologies in an all-stock transaction that values the enterprise at approximately USD 3.3 billion. The acquisition would strengthen BorgWarner’s power electronics products, capabilities and scale, creating a leader in electrified propulsion systems.

Delphi Technologies is a provider of propulsion technologies for internal combustion engines, hybrid and electric passenger cars and commercial vehicles. Headquartered in London, UK, the company operates technical centres, manufacturing sites, customer support service centres in 24 countries and employs more than 21,000 people around the world. BorgWarner is a supplier of technology solutions for combustion, hybrid and electric vehicles. With manufacturing and technical facilities in 67 locations in 19 countries, the company employs approximately 30,000 worldwide. In fiscal year 2019, BorgWarner and Delphi Technologies estimate that they generated USD 10.17 billion and USD 4.36 billion of net sales, respectively.

Under the terms of the agreement, Delphi Technologies stockholders would receive a fixed exchange ratio of 0.4534 shares of BorgWarner common stock per Delphi Technologies share. Upon closing of the transaction, current BorgWarner stockholders are expected to own approximately 84 % of the combined company, while current Delphi Technologies stockholders are expected to own approximately 16 %. The transaction is expected to close in H2 2020, subject to approval by Delphi Technologies’ stockholders, the satisfaction of customary closing conditions and receipt of regulatory approvals.

Following the closing of the transaction, 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. It would offer a more comprehensive portfolio of propulsion products and systems across combustion, hybrid and electric vehicles. The company will be led by Frédéric Lissalde, BorgWarner’s President and CEO, and Kevin Nowlan, BorgWarner’s CFO, and will operate as BorgWarner. It will be headquartered in Auburn Hills, MI, USA.

“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. “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 F. 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.”