Shareholders of London’s Delphi Technologies Approve Acquisition by Auburn Hills’ BorgWarner

Auburn Hills-based BorgWarner has announced that shareholders of London-based Delphi Technologies PLC approved BorgWarner’s all-stock acquisition of Delphi at a special meeting on Thursday. A majority of Delphi’s shareholders voted in favor of the transaction.
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Delphi customer technical center
Shareholders Delphi Technologies approved BorgWarner’s all-stock acquisition of Delphi. Pictured is Delphi’s Auburn Hills customer technical center. // Photo courtesy of Delphi Technologies

Auburn Hills-based BorgWarner has announced that shareholders of London-based Delphi Technologies PLC approved BorgWarner’s all-stock acquisition of Delphi at a special meeting on Thursday. A majority of Delphi’s shareholders voted in favor of the transaction.

“We appreciate that a large majority of Delphi Technologies’ shareholders have voted to approve the transaction, underscoring the value that we believe is inherent in bringing our companies together,” says Frédéric Lissalde, president and CEO of BorgWarner. “We are now one step closer to delivering the expected significant benefits of this transaction to our combined stakeholders. We look forward to closing the transaction, which is expected to occur in the second half of 2020.”

The acquisition was announced in January, when the companies said Delphi’s enterprise value was at about $3.3 billion.

Following the closing, the combined company will be led by Lissalde and Kevin Nowlan, CFO of BorgWarner. It will operate as BorgWarner and be headquartered in Auburn Hills. Delphi has a customer technical center in Auburn Hills, while its parent company is based in London.

In May, the companies announced they had amended certain terms of the agreement, representing a resolution to BorgWarner’s previously stated assertion that Delphi materially breached the definitive transaction agreement by drawing down on its full $500 million revolving credit facility, which Delphi disputed on the basis that BorgWarner unreasonably withheld and conditioned its consent.

Under the terms of the amendment, BorgWarner consented to Delphi’s draw down of its revolver. The amended transaction agreement also provides for new closing conditions requiring that, at the time of the transaction closing, the total amount of Delphi Technologies’ outstanding revolver borrowings do not exceed $225 million, and net of its cash balances do not exceed $115 million, and its net debt-to-adjusted EBITDA ratio does not exceed a specified threshold.

“We are pleased with the strong support from our shareholders for this transformative transaction, which we believe will create a leading propulsion technologies company that is uniquely equipped to serve OEMs and aftermarket customers around the world,” says Richard F. Dauch, CEO of Delphi. “We are excited to join forces with BorgWarner and look forward to delivering long-term value for all of our stakeholders.”

The closing is subject to the receipt of the remaining required regulatory approvals and satisfaction or waiver of other closing conditions.

BorgWarner offers clean and efficient technology solutions for combustion, hybrid, and electric vehicles. It has manufacturing and technical facilities in 67 locations in 19 countries and employs about 29,000 people worldwide.

Delphi focuses on advancing propulsion and aftermarket solutions to create cleaner, longer-lasting vehicles.

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