Behind Schaeffler's acquisition of Vipertech
On 9 October, a shocking news to the industry came out, Germany's famous automotive bearings, electric drive and internal combustion engine parts manufacturer Schaeffler Group announced that it intends to 3.64 billion euros (91 euros per share) cash offer, the acquisition of the former Continental Powertrain Division, also known as the electric drive and internal combustion engine products Vitesco Technology (Vitesco). On the same day, Vitesco confirmed the news.
The Schaeffler family's buyout plan Why does the Schaeffler Group want to buy Vitesco? Will the acquisition go ahead smoothly? Behind these questions, the role of the Schaeffler family cannot be ignored. To put it simply, the Schaeffler family is the major shareholder of Schaeffler Group, Continental Group and Weipai Technology, holding about half of the shares of Weipai Technology.
Specifically, the Schaeffler Group is a family-owned company from Germany that takes its name from the surname of its founder, Georg Schaeffler. Currently, the group is helmed by the founder's wife, Maria-Elisabeth Schaeffler-Tumann, as well as her son, Georg F.W. Schaeffler, who is now the chairman of the supervisory board of the Schaeffler Group. It can be said that the Schaeffler family has absolute control over the Schaeffler Group.
And then look at the relationship with the wei pai technology. 2009, the schaeffler group to "snake eat elephant" way, acquired most of the shares of the German continental group, the schaeffler family this control of the continental group, but also backed by a heavy debt, and after that had to sell the continental group shares several times in order to pay off the debt. However, so far, the Schaeffler family still holds 46% of the shares of Continental Group, is its largest shareholder.
Originally the powertrain division of Continental, Wipro was split off and listed on the Frankfurt Stock Exchange in Germany in September 2021 at an issue price of 59.8 euros per share. According to the agreement, after the split, every shareholder who holds five Continental shares will receive one share in WSP Technology accordingly. As a result, the Schaeffler family became the largest single shareholder of Wipertech and currently holds 49.94 per cent of Wipertech's shares through the investment companies IHO Verwaltungs GmbH and IHO Beteiligungs GmbH.
Regarding Schaeffler Group's acquisition of Wipertech, Bloomberg noted that the Schaeffler family has been looking at ways to reshape their industrial empire in the context of the electrification transformation of the automotive industry, and that the move will strengthen its position in the Electric Vehicle supply chain.
According to Marc-Rene Tonn, an analyst at leading investment bank UBS Warburg, the combination of Wipertech's electronics expertise with Schaeffler's mechanical expertise is in line with industrial logic.
"The successful acquisition and absorption of Wipertech will better drive Schaeffler's transformation into a more diversified and balanced product line, especially in the field of electric drives, where we will establish a leading position in the industry."Rosenfeld said.
It is understood that the development situation of the Weipai technology is good, mainly to provide for electric, hybrid and internal combustion engine drive system key components and intelligent system solutions, products include electric drive system, electronic control unit, sensors and actuators, and exhaust gas after-treatment solutions. In the second quarter of this year, Vipertech secured around €5 billion in new orders, 90 percent of which (€4.5 billion) related to electrified products.
Look at the Schaeffler Group, in recent years, also to the electric drive business leaning heavily on the products include electric motors, hybrid special transmission, electric drive axle, etc. 2022 Schaeffler Group's Automotive Technology Division of 12.3 billion euros in new orders, of which 5 billion euros from the electric drive business.
In a statement, the Schaeffler Group noted that the acquisition plan follows a "compelling strategic logic" and that "Schaeffler and Vipertech have highly complementary technology portfolios, particularly in the field of electrification, which will enable the combined company to offer best-in-class solutions in all areas and to take full advantage of the accelerating growth opportunities of electromobility. the opportunities of the accelerating growth of electromobility".
It is understood that Schaeffler has made adjustments and deployments in advance for the business units after the acquisition of Wipro Technology, which will form four business units: electric drives, powertrain and chassis, vehicle lifecycle solutions (aftermarket), and bearings and industrial solutions.
Specifically, the first is to merge Schaeffler's electric drive business with the electrification business of WPI to form a new "Electric Drive Division". With a total order intake of approximately €40 billion, the division has high growth potential and is expected to achieve stable profitability in the medium term. 9 percent of Group revenue in 2022 (on a consolidated basis) will be generated by the division, rising to 31 percent by 2030, making it Schaeffler's largest division. In this segment, Schaeffler sees its main competitors as Bosch, ZF, BorgWarner and Valeo.
The second is to package the internal combustion engine-related product lines of Vipertech and Schaeffler's internal combustion engine and chassis business to form the "Powertrain & Chassis Division", which is committed to becoming the market leader in the traditional powertrain and chassis market. 53% of the Group's revenue in 2022 (on a consolidated basis) will be accounted for by the division, which will decrease to 28% by 2030. decrease to 28 per cent.
The third is the packaging of Vipertech and Schaeffler's aftermarket business under the name "Vehicle Lifecycle Solutions".
The fourth is to separate Schaeffler's ancestral bearing business, including automotive bearings and industrial bearings, to form the "Bearing and Industrial Solutions Business Unit", in order to continue the lineage of Schaeffler's bearing business.
"With this business combination, a leading mobility technology company with four key divisions and revenues of around 25 billion euros will be created." Schaeffler Group noted in a statement. Based on 2022 figures, Schaeffler's acquisition of Wipro Technology brings the company's annual revenue to €25 billion, making the group comparable in size to Fria (Faurecia + Hella, €25.5 billion in 2022 revenue). Of this, €2.4bn in revenue is from the electric drive business, €13.1bn from powertrain and chassis, €2.5bn from aftermarket and €6.9bn from bearings.
In addition, the new Schaeffler will have more than 120,000 employees, 44 R&D centres and more than 100 production sites in key regions around the world, making it a giant in the global auto parts industry.
