In what seems to be one of the biggest deals in recent times, Schaeffler Group’s planned acquisition of Vitesco Technologies seems to be inching closer to reality. As per recent development, the Executive Board and Supervisory Board of Vitesco Technologies Group (Vitesco Technologies) has published a joint reasoned statement pursuant to section 27 of the German Securities Acquisition and Takeover Act on the voluntary public tender offer of Schaeffler (Schaeffler) dated November 15, 2023.
In addition, Schaeffler today published an updated tender offer, which includes an increase of the offer price to 94 euros (Rs 8,260) per Vitesco Technologies share.
The Executive Board and the Supervisory Board of Vitesco Technologies have agreed with Schaeffler’s view that the creation of a combined company can bring significant strategic advantages in certain areas. They favour the fact that the synergies envisaged by Schaeffler will be achieved primarily through growth and long-term value creation, rather than through site closures or job losses.
Highlight of the agreement
- The combined company is to be managed from Herzogenaurach. The allocation of the remaining divisional headquarters will be discussed in more detail between Vitesco Technologies and Schaeffler.
- The combined company will consist of four focused divisions, with the E-Mobility Division combining the expertise of Schaeffler (E-Mobility) and Vitesco Technologies (Electrification Solutions Division).
- It was agreed that Vitesco Technologies and Schaeffler would take into account the success factors of the Vitesco Group in the combined company when designing the organisational structure as part of the implementation of the business combination.
- The terms of employment of the employees of Vitesco Technologies, in particular their remuneration or entitlement to other employer benefits, will not change in the combined company as an immediate effect of the closing of the transaction.
- It was agreed that the E-mobility division of the combined company shall be managed by Vitesco Technologies executive Thomas Stierle. In addition, it is planned to adjust the composition of the Supervisory Board of the combined company taking its needs into account.
- Furthermore, Vitesco Technologies and Schaeffler have agreed on common principles for filling leadership positions below the Executive Board for the E-Mobility and Powertrain & Chassis divisions as well as for central functional areas in the combined company.
Subject to an agreement on the exchange ratio and the merger agreement, the Boards will submit the merger to the general meeting of Vitesco Technologies for resolution and, if approved with the required majority, complete it. Vitesco Technologies will manage its business independently both until the completion of the tender offer and thereafter until a possible merger.
