Takeover Tussle for Brakemaker Haldex Escalates With Higher Bid

Sept. 16, 2016

With the auto industry shifting toward self-driving and electric-vehicle technologies, parts makers are increasingly seeking to combine to boost development efforts and cut costs.

Bloomberg

The battle for control of Haldex AB entered the next round as one of the German suitors trumped its rival by raising its bid 14% to value the Swedish maker of truck brakes at 5.53 billion kronor (US$652 million).

Knorr-Bremse AG offered to pay 125 kronor a share in cash and reduced the minimum acceptance condition to 50% from 90%, the Munich-based supplier of braking systems for trains and cars said Friday in a statement. The new bid is 32% higher than an initial proposal in July that kicked off the tussle. Haldex shares traded at 126.50 kronor a share at 11:03 a.m. in Stockholm.

With the auto industry shifting toward self-driving and electric-vehicle technologies, parts makers are increasingly seeking to combine to boost development efforts and cut costs. Automakers are also looking to partner with companies that can supply components globally, which requires greater scale from parts makers. The bidding for Haldex was kicked off with an unsolicited bid from truck-parts producer SAF-Holland SA, which has since withdrawn after being outbid by ZF Friedrichshafen AG and Knorr-Bremse.

ZF, which has secured 21% of Haldex’s shares with its 110 krona-a-share bid on Sept. 14, said it will “analyze the situation and calmly reach the appropriate conclusions.” The closely held maker of transmissions and other components gained backing from Haldex’s board after matching Knorr-Bremse’s offer earlier this week. That support may now be at risk.

The new offer represents “a substantial increase” to Knorr-Bremse’s previous bid, Haldex board member and acting chairman Magnus Johansson said in a telephone interview. Haldex’s board will need to evaluate the proposal after not supporting the earlier offer in part because of expected lengthy antitrust reviews, he said. ZF has said it has already secured approval from all relevant competition watchdogs.

“Haldex and Knorr-Bremse are businesses from the same breed, sharing a deep-rooted tradition in the commercial-vehicle industry with innovation at their heart,” Knorr-Bremse Chief Executive Officer Klaus Deller said in the statement. “We have changed this offer to give comfort to the shareholders for deal completion.”

Knorr-Bremse also said it now holds 11.35% of Haldex shares, up from 8.4% previously.

By Elisabeth Behrmann