BorgWarner Inc. will pay. (NYSE:BWA) raises $880 million to acquire commercial vehicle battery manufacturer AKASOL. The European manufacturer has $2.4 billion of business booked with major truck makers including Volvo Group and Daimler Trucks.
AKASOL designs and manufactures customizable lithium-ion battery systems for buses, commercial vehicles, railway vehicles and industrial vehicles, as well as in ships and boats. It has 330 full-time employees, three facilities in Germany and one in the United States
The acquisition accelerates BorgWarner’s push into commercial vehicle electrification. It pays a 23% premium over the average AKASOL (ASL.D.DX) share price over the past three months. BorgWarner is also taking on $32.7 million of AKASOL’s debt. The deal is mostly cash. With the deal expected to close late in the second quarter.
“AKASOL is an excellent strategic fit as BorgWarner seeks to further expand its electrification portfolio and capitalize on the industry’s profound shift toward electrification,” Frédéric Lesalde, president and CEO of BorgWarner, said in a press release.
BorgWarner spent $3.3 billion last October to buy Delphi Technologies, once part of the world’s largest auto supplier.
“The acquisition of the prestige battery assembler, AKASOL, deepens the company’s reach into commercial vehicles, which we believe today makes up about half of the teens portion of combined BorgWarner/Delphi revenue,” Cowen analyst Jeffrey Osborne said in a report. Research note.
The success of the acquisition is guaranteed
The success of the acquisition of Akasol has been guaranteed. Holders of 59% of the outstanding shares of the Darmstadt, Germany-based company have committed to voting in favor of the business combination. AKASOL will operate as a wholly-owned subsidiary of BorgWarner and will retain its current management. This includes AKASOL founder and CEO Sven Schulz.
“BorgWarner shares our vision for zero-emission mobility, and with the combined forces, we will expand AKASOL’s technology and market leadership for high-performance battery systems,” Schultz said.
Completes the battery joint venture
The AKASOL acquisition completes a 60-40 joint venture BorgWarner formed in 2019 with Romeo Power. The Los Angeles-based battery maker has big business with Canadian electric truck maker Lion Electric Co and startup Nikola Corp (NASDAQ: NKLA).
“Our investment in Romeo was our first step into electric vehicle batteries. The investment has been successful so far,” BorgWarner spokeswoman Michelle Collins told FreightWaves.
“Our interest in and commitment to electrification has increased, and the upcoming acquisition of AKASOL is an important next step as we develop and accelerate our strategic goals, which include building a leadership position in this area over the long term.”
BorgWarner sees AKASOL helping to strengthen its battery systems and commercial off-road vehicle businesses, attracting interest and investment in its traditional diesel-based powertrain products. It expects AKASOL to continue generating annual revenues of $1 billion by 2030.
The global market for electric vehicles and hybrid lithium-ion battery systems for all vehicles is expected to be worth an estimated $140 billion by 2030, according to IHS Markit.
“This is an area where we will see more adoption in the next few years,” Sam Abuelsamid, principal analyst at Guidehouse Insights, told FreightWaves. “A lot of big companies are transitioning their fleets to electric vehicles instead of diesel. Getting a foothold in these segments will be important for a company like BorgWarner.
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