BorgWarner to acquire Delphi Technologies

28 January 2020

BorgWarner and Delphi Technologies have entered into a definitive transaction agreement under which BorgWarner will acquire Delphi Technologies in an all-stock transaction that values Delphi Technologies at approximately $3.3 billion.

Under the terms of the agreement, which has been approved by the boards of directors of both companies, Delphi 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%.

In fiscal year 2019, BorgWarner and Delphi Technologies estimate that they generated $10.17 billion and $4.36 billion of net sales, respectively. Following the close 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.

Combining with Delphi would enable BorgWarner to maintain flexibility across combustion, hybrid, and electric propulsion (C-H-E), the company said. The acquisition is expected to bring a number of strategic benefits:

• Strengthen BorgWarner’s power electronics products, capabilities and scale, creating a leader in electrified propulsion systems that is well-positioned to take advantage of future propulsion migration.
• Enhance BorgWarner’s combustion, commercial vehicle and aftermarket businesses.
• Drive synergies—BorgWarner expects the combined company to realize run-rate cost synergies of approximately $125 million by 2023 driven primarily by SG&A and procurement savings.
• Deliver earnings accretion and preserve BorgWarner’s strong balance sheet.

The transaction is expected to close in the second half of 2020, subject to approval by Delphi stockholders, the satisfaction of customary closing conditions and receipt of regulatory approvals.

Source: BorgWarner