The proposed merger between Schaeffler and Vitesco Technologies Group has stirred the share prices of both companies as well as their competitors. The planned €3.64 billion (€1 = $1.05) union aims to establish a group with an impressive €25 billion in annual sales under the supervision of IHO Holdings.
Vitesco shares traded 21% higher at EUR 91 following the announcement, while Schaeffler's shares took a downturn, falling 6.5% to EUR 5.10. The market reaction also rippled through to rivals Continental, Valeo (EPA:VLOF) and Forvia, although specific impacts on these companies were not detailed.
The merger has received support from Warburg analyst Marc-Rene Tonn, who views the combination of Vitesco's electronics and Schaeffler's mechanical expertise as a strategic move. This alliance is further bolstered by Vitesco's substantial €30 billion order book in the electric-mobility sector.
One unique aspect of this merger is that Schaeffler hasn't set a minimum acceptance threshold for its offer. This allows shareholders to tender their holdings immediately or wait until the expected completion of the merger in Q4 2024.
The process towards unification involves several steps, including converting Schaeffler's nonvoting shares into voting ones, conducting shareholder meetings for proposal voting, and exchanging Vitesco shares for newly issued Schaeffler shares. The first step towards this combination has already begun.
No merger control clearance is necessary for this deal to progress, which may expedite the overall process. This merger represents a significant development within the auto parts industry, with potential long-term impacts on market dynamics and competition.
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