ZF Friedrichshafen AG is interested in acquiring TRW Automotive Holdings Corp., which is priced at $13 billion and aims to build the world's second-largest auto parts supplier.
The transaction amount may reach $13 billion
Insiders revealed to the media that the lender told ZF that the financing plan for pure cash bidding is feasible, and the bid price of Tianhe will be as high as 13 billion US dollars. Two people familiar with the matter said that ZF is working with Citigroup to offer an offer at a price of 110 to 112.50 US dollars per share.
According to last week's news, the actual value of TRIP is currently between 11 billion and 12 billion US dollars. After the ZF acquisition intention, Tianhe’s share price on the New York Stock Exchange rose 8% to a record high of $98.91, bringing the market value to $11 billion.
Previously, TRW Automotive Holdings issued a statement saying that the company is evaluating a “primary and non-binding takeover offer†but did not give the name of the offeror. Several media channels pointed out that the buyer is ZF. The other contract is still evaluating other strategic options and has hired Goldman Sachs as a financial advisor. ZF executives also confirmed the report last week.
Barclays Bank said in the analysis report that the above news may prompt a larger merger and restructuring. Some analysts believe that Trina will also receive an offer from other auto parts giants, such as Magna. If ZF and TRW are merged, it will be the largest acquisition in the global auto parts industry in seven years, and the combined company's revenue will rank second in the global parts industry.
Morgan Stanley and several other European banks are also providing financial advisory services to ZF.
According to the financial reports released by various companies, in 2013, Trina and ZF's operating income reached 17.435 billion US dollars and 16.8 billion euros (about 22.86 billion US dollars) respectively, and the revenues of the two companies were added. At $40.3 billion, according to data from the American Automotive News, the overall revenue of Trina and ZF is approximately $36.5 billion.
If this acquisition is completed, it will become the largest acquisition in ZF's history, and its scale will be second only to the German Bosch Group, thus competing with global auto parts giants such as the mainland.
Transaction acceleration
An anonymous source last week said that Trina had approved ZF’s partial due diligence and that the parties had not discussed the price of the deal.
“The company has not yet made a decision on any specific strategic transaction or option, nor has a timetable for this strategic review process,†Tianhe said in a statement: “We do not guarantee that the above process will result in the completion of any transaction or company. Changes to existing business plans."
This time, an insider said that although there is still no agreement and the price is still under negotiation, the negotiations between the two sides have accelerated the progress. ZF and Trina may reach an agreement within the next three to four weeks.
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