From The News and Observer
BERLIN, Germany — U.S. automotive company BorgWarner said Monday it is buying a controlling stake in German supplier Beru AG and would make an offer for the remaining shares in a nearly $800 million deal that it hopes will strengthen its position with global automakers.
BorgWarner said its German subsidiary was acquiring about 63 percent of Beru, which specializes in diesel cold start technology, ignition technology, electronics and sensors, from private equity firm Carlyle Group and a group of family shareholders.
BorgWarner is paying $476 million in total for the stakes held by Carlyle and the family shareholders, or $75.59 per share, the company said. Carlyle holds 37.1 percent of Beru, based in Ludwigsburg.
It said it would launch an offer of $86.48 per share for the remaining Beru stock.
That would boost the total value of the deal to $796 million.
Chicago-based BorgWarner makes powertrain products for major automakers. It said it expects the purchase of the initial 63 percent stake to be completed in January.
“Tightening emissions standards worldwide are expected to accelerate demand for diesel-powered light vehicles globally in the next few years,” BorgWarner chief executive Timothy Manganello said.
“Beru’s technology and product expertise will complement and strengthen our market presence with global automakers, while enhancing our ability to meet rapidly growing demand for technologies that address fuel efficiency, performance and air quality,” he added.
Beru shares gained 13.5 percent after Monday’s announcement, soaring to $87.33 on the Frankfurt exchange.
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