Schaeffler Bids €3.64 Billion For Vitesco To Form EV Giant

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As the worldwide demand for EVs surges, Schaeffler plans to acquire Vitesco Technologies. They anticipate the merged entity will deliver top-tier e-mobility solutions and tap into substantial synergistic advantages.

German motion tech giant Schaeffler has initiated a public tender offer valued at 3.64 billion euros to acquire Vitesco Technologies Group AG. They aim to establish a top-tier motion technology entity comprising four specialized divisions, notably an E-Mobility division with substantial growth potential.

Vitesco Technologies, situated in Regensburg, employs approximately 38,000 individuals across nearly 50 global sites. It generated a revenue of 9.07 billion euros in 2022 and is influential in the electric vehicle component market, in addition to its traditional ICE parts business.

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Schaeffler believes that merging with Vitesco will enhance their competitive edge. The technological offerings of both companies in electrification are highly compatible, which positions the merged entity to deliver superior solutions in the e-mobility sector. This fusion will harness the emerging e-mobility growth prospects. Furthermore, the unified company aims to gain profitability in traditional powertrain tech, chassis, and the Automotive Aftermarket sector.

Schaeffler envisions structuring the joint enterprise into four distinct, leading divisions:

  1. E-Mobility Division: This will integrate Schaeffler and Vitesco’s synergistic resources, aiming to spearhead the e-mobility market with a projected joint order book nearing 40 billion euros and substantial growth potential.
  2. Powertrain & Chassis Division: This will incorporate the seasoned businesses of both partners, establishing dominance in the traditional powertrain and chassis arena.
  3. Vehicle Lifetime Solutions Division: This will merge Vitesco’s Automotive Aftermarket endeavours with Schaeffler’s current platform, forming a cohesive platform leader.
  4. Bearings & Industrial Solutions Division: This will feature Schaeffler’s existing Industrial Division and Automotive Bearings business, striving to become the premier global Bearings & Industrial Solutions company, active in four market clusters.

Schaeffler AG’s CEO, Klaus Rosenfeld, feels that this tender offer marks a pivotal change for Schaeffler. By amalgamating with Vitesco, they aim to establish an eminent Motion Technology Company with four specialized divisions, a diverse portfolio, and considerable scale in all its operations. This also involves the emergence of a top-notch e-mobility contender with vast growth prospects. This union is projected to fortify both Schaeffler and Vitesco, benefiting all stakeholders.

Vitesco is devoted to crafting efficient electrification technologies suitable for a range of vehicles and boasts a substantial EV portfolio. This encompasses 48-volt electrification solutions, electric drives, and hybrid and battery-electric vehicle power electronics. The alliance between Schaeffler and Vitesco is expected to yield considerable synergies, with an estimated EBIT enhancement of 600 million euros annually by 2029 and initial integration expenses up to 665 million euros.

In light of 2022’s annual statistics, post-merger Schaeffler is anticipated to report sales close to 25 billion euros, featuring a harmonious divisional and geographical blend. The unified company will have a workforce exceeding 120,000, with 44 R&D hubs and over 100 manufacturing locations globally.

Schaeffler and Vitesco are a fit for each other not solely based on technology but also in corporate culture. They both champion technological innovation, prioritize sustainability, are based in Bavaria, and are affiliated with IHO Holding.

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