TRW Automotive Inks $12.4B Deal with ZF Friedrichshafen

TRW Automotive Holdings Corp. (NYSE:TRW) signed a definitive agreement to be acquired by ZF Friedrichshafen AG to create a leading automotive supplier business with combined sales of approximately $41 billion.

TRW Automotive – ZF Friedrichshafen: Terms of the agreement

Under the terms of the agreement ZF Friedrichshafen will purchase TRW Automotive Holdings Corp. (NYSE:TRW) for $12.4 billion in an all-cash transaction. It will become a separate business unit of the German company after the acquisition.

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The shareholders of TRW Automotive Holdings Corp. (NYSE:TRW) will receive $105.69 per share. The deal was unanimously approved by the leadership of both companies.

ZF Friedrichshafen will finance the transaction on conservative terms. The German company said it received financing commitments from Citigroup Inc (NYSE:C) and Deutsche Bank AG (ADR) (NYSE:DB). ZF Friedrichshafen expected to cut financial leverage significantly over the next years due to a strong growth and cash flow profile of the combined company.

The German company expected to complete the deal in the first-half of 2015 subject to customary closing conditions and regulatory approvals. The shares of TRW Automotive Holdings Corp. (NYSE:TRW) will be delisted from the New York Stock Exchange (NYSE) following the closing of the acquisition.

Benefits to all stakeholders

According to Stefan Sommer, CEO of ZF Friedrichshafen, acquiring TRW Automotive Holdings Corp. (NYSE:TRW) fits the long-term strategy of the German company.

“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,” said Sommer.

On the other hand, John C. Plant, Chairman and CEO of TRW Automotive Corp. (NYSE:TRW) said, “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.”

ZF Friedrichshafen estimated that the acquisition of TRW Automotive Corp. (NYSE:TRW) will more than double its sales in China and the United States.