Sept. 15, 2014—German auto parts maker ZF Friedrichshafen on Monday announced it has entered into an agreement to purchase TRW Automotive for $12.4 billion.
The deal, approved by ZF's supervisory board and management board and TRW's board of directors, will earn TRW stockholders $105.60 in cash for each share of TRW stock, putting TRW’s value at $13.5 billion. With combined sales of roughly $41 billion and a total workforce of 138,000 employees, the transaction will create one of the largest auto suppliers in the world.
"The acquisition of TRW fits perfectly into our long-term strategy,” said Stefan Sommer, Chief Executive Officer of ZF. “The transaction combines two highly successful companies that have remarkable track records of innovation and growth and solid financial positions. We are strengthening our future prospects by enlarging our product portfolio with acknowledged technologies in the most attractive segments."
Both companies are involved in high-growth industry segments, such as fuel efficiency, increased safety requirements and autonomous driving. ZF specializes in driveline and chassis technologies. TRW has focused on active and passive safety technologies, including advanced driver assistance systems.
"We have long respected ZF as a very successful company in our industry with similar values and focus on innovation,” said John C. Plant, chairman and CEO of TRW. “This transaction provides significant benefits for our shareholders who will receive a full and certain value for their shares, as well as for our employees, customers and communities, all of which will reap the benefits of being part of a larger, more diversified global organization.”
The deal is expected to close in the first half of 2015.
