Vitesco Technologies publishes Reasoned Statement on the Public Tender Offer and enters into Business Combination Agreement with Schaeffler

Vitesco Technologies publishes Reasoned Statement on the Public Tender Offer and enters into Business Combination Agreement with Schaeffler

New Delhi, 30th November 2023: The Executive Board and Supervisory Board of Vitesco Technologies Group AG (“Vitesco Technologies”) today published a joint reasoned statement pursuant to section 27 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz – WpÜG) on the voluntary public tender offer of Schaeffler AG (“Schaeffler”) dated 15 November 2023.

The reasoned statement considers the Business Combination Agreement (“BCA”), signed with Schaeffler today that sets out key parameters of the business combination and the framework for future cooperation between the two companies. In addition, Schaeffler today published an updated tender offer, which includes an increase of the offer price to EUR 94 per Vitesco Technologies share.

The Executive Board and the Supervisory Board of Vitesco Technologies (the “Boards”) agree with Schaeffler’s view that the creation of a combined company can bring significant strategic advantages in certain areas. They favour the fact that the synergies envisaged by Schaeffler will be achieved primarily through growth and long-term value creation, rather than through site closures or job losses.

The Business Combination Agreement contains the following key points:

  1. The combined company is to be managed from Herzogenaurach. The allocation of the remaining divisional headquarters will be discussed in more detail between Vitesco Technologies and Schaeffler. Vitesco Technologies and Schaeffler are aware of the importance of the Vitesco Technologies locations for the combined company.
  2. The combined company will consist of four focused divisions, with the E-Mobility Division combining the expertise of Schaeffler (E-Mobility) and Vitesco Technologies (Electrification Solutions Division).
  3. It was agreed that Vitesco Technologies and Schaeffler would take into account the success factors of the Vitesco Group in the combined company when designing the organisational structure as part of the implementation of the business combination.
  4. The terms of employment of the employees of Vitesco Technologies, in particular their remuneration or entitlement to other employer benefits, will not change in the combined company as an immediate effect of the closing of the transaction.
  5. It was agreed that the E-mobility division of the combined company shall be managed by Vitesco Technologies executive Thomas Stierle. In addition, it is planned to adjust the composition of the Supervisory Board of the combined company taking its needs into account.
  6. Furthermore, Vitesco Technologies and Schaeffler have agreed on common principles for filling leadership positions below the Executive Board for the E-Mobility and Powertrain & Chassis divisions as well as for central functional areas in the combined company.

On this basis, the Boards of Vitesco Technologies will constructively support the implementation of the tender offer and the business combination in accordance with the BCA. A joint integration committee with equal representation will be set up to coordinate the principles laid down in the BCA.

Subject to an agreement on the exchange ratio and the merger agreement, the Boards will submit the merger to the general meeting of Vitesco Technologies for resolution and, if approved with the required majority, complete it.

Vitesco Technologies will manage its business independently both until the completion of the tender offer and thereafter until a possible merger.

 

Evaluation of the offer price

The Executive Board and Supervisory Board have carefully and intensively analysed and evaluated the adequacy of the consideration offered. In doing so, the Boards have each made their own considerations as well as taking into account, among other factors, the inadequacy opinions of J.P. Morgan, Lazard and Perella Weinberg Partners.

On this basis, against the background of their own assessment of the current situation and the development potential of Vitesco Technologies as well as the overall circumstances of the offer, the Management Board and the Supervisory Board also consider the increased offer price per Vitesco Technologies share to be inadequate from a financial point of view.

Shareholders who do not wish to retain a stake in Vitesco Technologies in view of the intended merger of Vitesco Technologies into Schaeffler may accept the tender offer or, in the event that the market price is higher than the offer price, sell their Vitesco Technologies shares on the stock exchange.

Even if the cash consideration offered does not adequately reflect the long-term value of the company, the tender offer may represent a potentially attractive exit opportunity for risk-averse or short-term investors in the current market environment.

Shareholders who neither accept the offer nor sell their shares on the stock exchange will retain a stake in Vitesco Technologies but will receive shares in the combined company upon completion of the merger. The applicable exchange ratio will be agreed between Vitesco Technologies and Schaeffler at a later date. This agreement will be made on the basis of a determination of the enterprise values of Schaeffler and Vitesco Technologies prepared by an independent joint valuation expert in accordance with recognised valuation principles.

The Executive Board and Supervisory Board of Vitesco Technologies emphasise that Vitesco Technologies shareholders must make their own decision as to whether and to what extent they accept the offer, taking into account their individual circumstances.

Vitesco Technologies is a leading international developer and manufacturer of cutting-edge drive systems for sustainable mobility. With intelligent system solutions and components for electric, hybrid, and internal combustion drive systems, Vitesco Technologies is making mobility clean, efficient, and affordable. The product portfolio includes electric drives, electronic controls, sensors and actuators, and exhaust gas treatment solutions. In 2022, Vitesco Technologies generated sales of €9.07 billion and employs a workforce of around 38,000 employees at 50 locations. Vitesco Technologies is headquartered in Regensburg, Germany.

Legal information: This press release is intended for information purposes only and constitutes neither an invitation to sell nor an offer to buy securities of Vitesco Technologies or Schaeffler. The final terms and conditions of the Offer are solely determined by the offer document published by Schaeffler and any amendments thereto. Furthermore, the information in this press release does not constitute an explanation of or a supplement to the contents of the joint reasoned statement of the Executive Board and Supervisory Board of Vitesco Technologies. The joint reasoned statement was published on the website of Vitesco Technologies under https://ir.vitesco-technologies.com/websites/vitesco/German/0/investoren.html in German as well as under https://ir.vitesco-technologies.com/websites/vitesco/English/0/investors.html as a non-binding English translation. Physical copies of the joint reasoned statement are available at Vitesco Technologies Group AG, Siemensstraße 12, 93055 Regensburg, Germany (order by phoning +49 (0) 941 2031 6381 or by sending an e-mail to jens.von.seckendorff@vitesco.com indicating a mailing address) for issue free of charge. Investors and holders of securities of Vitesco Technologies are strongly advised to read the offer document, the joint reasoned statement and all other announcements in connection with the Offer as soon as they are published, as they contain or will contain important information.

All information contained in this press release has been prepared by Vitesco Technologies solely for use in this release. The information contained in this communication has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. The information contained in this announcement should be considered in the context of the circumstances prevailing at the date hereof and has not been and will not be updated to reflect material developments that may occur after the date hereof. Vitesco Technologies may change, modify or otherwise alter the contents of this notice in any respect without obligation to notify any person of such revision or alteration.

Any forward-looking statements contained in this document are not statements of fact and are characterized by the words “will”, “expect”, “believe”, “estimate”, “intend”, “aim”, “assume” and similar expressions. These statements express the intentions, opinions or current expectations and assumptions of Vitesco Technologies. These forward-looking statements are based on current plans, estimates and forecasts that Vitesco Technologies has made to the best of its knowledge, but do not claim to be correct in the future. Forward-looking statements are subject to risks and uncertainties that are generally difficult to predict and are usually beyond the control of Vitesco Technologies. These expectations and forward-looking statements may prove to be inaccurate and actual developments may differ materially from forward-looking statements. Vitesco Technologies assumes no obligation to update forward-looking statements with regard to actual developments or events, general conditions, assumptions or other factors.

Rabindra

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