Schaeffler eyes full acquisition of Vitesco
Photo courtesy of Vitesco

Schaeffler eyes full acquisition of Vitesco

Schaeffler AG, an established automotive supplier based in Bavaria, Germany, has made a voluntary public purchase offer to acquire all outstanding shares of Vitesco Technologies Group AG. The proposed acquisition, valued at billions of euros, is part of Schaeffler’s strategic move to position itself as a dominant player in Germany’s electromobility sector.

The acquisition proposal involves a per-share purchase price of EUR91 (USD96.37), aiming to facilitate the merger of the two automotive giants. The amalgamation of Schaeffler and Vitesco is anticipated to give rise to a colossal motion technology entity boasting 120,000 employees, 100 manufacturing facilities, and 44 research and development centers. The merged entity is projected to generate annual sales reaching EUR25 billion (USD26.47 billion), as outlined in Schaeffler’s statement.

The two companies are noted for their complementary technological assets, especially in the realm of electromobility. The merger is seen as a strategic move to capitalise on the burgeoning opportunities in the electromobility sector, driven by the global shift towards sustainable and green transportation solutions.

Currently, the Schaeffler family holds a 49.9% stake in Vitesco. However, the acquisition’s fruition hinges on increasing this stake to a 75% majority, as reported by Süddeutsche Zeitung. Should the Vitesco shareholders greenlight the proposal, the merger is slated for completion by the close of 2024.

Germany’s automotive industry, renowned for its engineering prowess, is currently navigating the complex transition towards climate-neutral mobility. The industry, traditionally anchored in combustion engine vehicles, is grappling with the shift towards electric vehicles (EVs). Despite concerted efforts by the German government to expedite this transition, skepticism abounds regarding the attainment of the set sectoral targets.

A report by the Center of Automotive Management (CAR) casts doubts on Germany’s ability to meet its ambitious goal of having 15 million electric vehicles (EVs) on the roads by 2030. The report indicates a potential shortfall of up to 50%, underscoring the monumental challenges inherent in this transition.

The proposed Schaeffler-Vitesco merger is emblematic of the strategic realignments and collaborations anticipated within the automotive industry, as key players seek to bolster their capacities and competencies to navigate the evolving landscape marked by the rapid adoption of EVs and sustainable mobility solutions.