@IAA: ZF Extolls “Friendly Takeover” Of Haldex

By Mike Brezonick21 September 2016

At a press conference on the first day of IAA Commercial Vehicles show in Hannover, Germany, ZF CEO Dr. Stefan Sommer affirmed the company’s intent to acquire the Swedish commercial vehicle supplier, despite a higher per-share offer from fellow German commercial vehicle component giant Knorr-Bremse.

“We would like a friendly takeover,” Sommer said, whose company has been engaged in a bidding war with Knorr-Bremse over the last week.

The Haldex board and has said it welcomed the ZF bid and reinforcing that were statements by Haldex CEO Bo Annvik, who took the stage alongside Sommer at ZF’s press conference.

“There is no overlap between our products,” said Annvik of ZF. “We complement each other very strongly and we as a company could absolutely benefit from more electronics and more software development resources going forward.

“The other factor is that there is very low risk in the transaction link to ZF. As you heard Dr. Sommer say, they have already the antitrust clearances and this can be a fairly quick process now. It can be finalized in the next couple of weeks and a formal payment to the shareholders (can be) already in October which is obvious very positive for them.

“he Knorr situation is much more complicated. Knorr is our main competitor. We offer eight different product lines as a company and we compete with Knorr on all those eight lines. That definitely leads to a phase 2 investigation in an antitrust perspective and that can be over to six to 12 months. And the regulatory bodies will, I assume in the final end, ask for some divestitures or carve-outs in order to please them and have the competitive situation in a better way. That’s easier said than done. We have eight larger plants globally and seven of them are fully integrated, which means that we produce a lot of different products in those plants. So it’s difficult to single out something. The R&D is also separate from those plants. So the antitrust situation is very tricky and can be lengthy.

“So the competitive situation and a disruptive transaction process is why out board of directors is more negative to a Knorr bid.”

In a statement released after ZF’s press conference however, Knorr said “Our perspective is unchanged.”

“We have made a higher offer to shareholders, it is superior at SEK 125 (about US$14.59 per share),” the statement said. “We are convinced that we can create more value from a strategic point of view and provide better prospects for Haldex. We have received very positive signals from investors on our offer increase during the day. We are fully committed to successfully close this transaction.

“We noted the recent statements of the Haldex management. In general, the position of the Haldex Board is well-known to the market. The situation remains unchanged: Knorr-Bremse has announced the higher bid and offers a compelling industrial logic to Haldex. In the end it is for the shareholders to decide where they see the higher value.”

A video of the ZF press conference is available here.

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