German car part makers Schaeffler, Vitesco sign merger agreement

German auto part maker Schaeffler said Wednesday it had formally entered into a merger agreement with Vitesco, the latest step in its bid to create a dominant supplier in the burgeoning market for electric vehicles.

Schaeffler said a merger agreement was signed following the approval of the two companies’ supervisory boards.

“Preparations for the integration of Vitesco into Schaeffler are making good progress,” Schaeffler CEO Klaus Rosenfeld said in a statement.

“We are confident that we will complete the transaction as planned in the fourth quarter,” he added.

As previously agreed, Vitesco Technologies shareholders will receive 11.4 Schaeffler shares in exchange for one Vitesco share.

Schaeffler in November raised its bid for rival Vitesco from 91 euros (US$100) to 94 euros per share.

The deal values Vitesco at around 3.8 billion euros, according to Bloomberg News, and comes as part of a wider shift in the auto industry towards lower-emissions driving.

Holding companies owned by the billionaire Schaeffler family already control 49.9 per cent of Vitesco’s shares.

Vitesco, a maker of electric motors and other car components, was spun off from German giant Continental in 2021.

Schaeffler said it plans to create a ‘leading motion technology company’ by joining up with Vitesco. — AFP

“Especially in the fields of electrification, Schaeffler and Vitesco have highly complementary technology portfolios” with ‘significant growth potential’, the company said when it announced its interest in a merger last year.