News Release
BorgWarner to Acquire Delphi Technologies in All-Stock
Transaction to Strengthen Propulsion Systems Leadership
• Enhances Power Electronics Products, Capabilities and Scale
• Consistent with BorgWarner’s Balanced Propulsion Strategy
• Expect Meaningful EPS Accretion in Second Full Year While Preserving Strong Balance
Sheet
• Expect Approximately $125 Million of Run-Rate Cost Synergies to Be Achieved by 2023
• BorgWarner Authorizes $1 Billion Share Repurchase Program
Auburn Hills, Michigan & London, UK, January 28, 2020 – BorgWarner Inc. (NYSE: BWA) and
Delphi Technologies PLC (NYSE: DLPH) today announced that they have entered into a
definitive transaction agreement under which BorgWarner will acquire Delphi Technologies in an
all-stock transaction that values Delphi Technologies’ enterprise value at approximately $3.3
billion.
The acquisition would strengthen BorgWarner’s power electronics products, capabilities and
scale. Combining with Delphi Technologies is consistent with BorgWarner’s evolution towards the
propulsion market of the future and would enable BorgWarner to maintain flexibility across
combustion, hybrid, and electric propulsion (C-H-E).
Under the terms of the agreement, which has been approved by the boards of directors of both
companies, Delphi Technologies stockholders would receive a fixed exchange ratio of 0.4534
shares of BorgWarner common stock per Delphi Technologies share. Upon closing of the
transaction, current BorgWarner stockholders are expected to own approximately 84% of the
combined company, while current Delphi Technologies stockholders are expected to own
approximately 16%.
In fiscal year 2019, BorgWarner and Delphi Technologies estimate that they generated $10.17
billion and $4.36 billion of net sales, respectively. Following the close of the transaction, the
combined company is expected to be one of the leading pure-play propulsion companies globally,
serving light and commercial vehicle manufacturers and the aftermarket. The combined company
would offer a unique, more comprehensive portfolio of industry-leading propulsion products and
systems across combustion, hybrid and electric, resulting in greater content per vehicle relative to
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BorgWarner today.
“This exciting transaction represents the next step in BorgWarner’s balanced propulsion strategy,
strengthening our position in electrified propulsion as well as our combustion, commercial vehicle
and aftermarket businesses,” said Frédéric Lissalde, President and CEO of BorgWarner. “Delphi
Technologies will bring proven leading power electronics technologies, talent and scale that will
complement our hybrid and electric vehicle propulsion offerings. As a combined company, we
look forward to delivering enhanced solutions to our customers while driving increased value for
our stockholders.”
Mr. Lissalde added, “We have a great deal of respect for Delphi Technologies’ team around the
world and look forward to welcoming them to BorgWarner. We are confident that together we will
be able to move faster to address market trends toward electrification.”
“This is a compelling transaction that we are confident delivers clear benefits to our stakeholders,”
said Richard F. Dauch, CEO of Delphi Technologies. “Delphi Technologies’ portfolio is highly
complementary to BorgWarner’s, and together we plan to create a pioneering propulsion
technologies company uniquely equipped to serve OEMs and aftermarket customers around the
world. BorgWarner’s team shares our focus on addressing today’s and tomorrow’s challenges,
and the combination will create exciting opportunities for our employees. We also expect our
stockholders will benefit from the opportunity to participate in the future growth and upside
potential of the combined company.”
Compelling Strategic and Financial Benefits:
Bringing BorgWarner and Delphi Technologies together is expected to:
• Strengthen BorgWarner’s power electronics products, capabilities and scale,
creating a leader in electrified propulsion systems that is well-positioned to take
advantage of future propulsion migration. Delphi Technologies brings industry leading
power electronics technology and talent, with an established production, supply and
customer base. The combined company would offer customers a suite of integrated and
standalone offerings of power electronics products (including high voltage inverters,
converters, on-board chargers and battery management systems) and capabilities
(including software, systems integration and thermal management).
• Enhance BorgWarner’s combustion, commercial vehicle and aftermarket
businesses. Delphi Technologies’ breadth of combustion propulsion products
complements BorgWarner’s innovative portfolio, which is focused on clean technologies to
increase efficiency and performance of modern combustion vehicles. Adding Delphi
Technologies’ commercial vehicle and aftermarket business results in more balance
across light vehicles, commercial vehicles and the aftermarket.
• Drive meaningful synergies. BorgWarner expects the combined company to realize run-
rate cost synergies of approximately $125 million by 2023 driven primarily by SG&A and
procurement savings. These savings are incremental to Delphi Technologies’ and
BorgWarner Inc. BorgWarner to Acquire Delphi Technologies in All-Stock Transaction to
Strengthen Propulsion Systems Leadership
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BorgWarner’s existing cost reduction plans. In addition, BorgWarner expects significant
long-term revenue synergies primarily from the opportunity to offer more integrated
electrified products, creating further value for the combined company’s stockholders.
• Deliver earnings accretion and preserve BorgWarner’s strong balance sheet. The
transaction is expected to be meaningfully accretive to adjusted GAAP earnings per share
in the second full year after closing. BorgWarner expects the combined company to
maintain a strong balance sheet, with a 2019 pro forma gross debt to adjusted EBITDA
ratio of approximately 1.6x at closing.
BorgWarner Authorizes Share Repurchase Program
BorgWarner today also announced that its Board of Directors has authorized a share repurchase
program of up to $1 billion to be executed over the next three years. This is consistent with the
company’s historic approach to capital allocation and demonstrates confidence in its plan to
deliver strong free cash flow generation over the long term. The timing and amount of any share
repurchases will be based on market conditions, share price and other factors. Repurchases may
be made in the open market or in privately negotiated transactions and may be made under Rule
10b5-1 plans.
Timing and Approvals
The BorgWarner/Delphi Technologies transaction is expected to close in the second half of 2020,
subject to approval by Delphi Technologies’ stockholders, the satisfaction of customary closing
conditions and receipt of regulatory approvals.
Management and Headquarters
Following the closing of the transaction, the combined company will be led by Frédéric Lissalde,
BorgWarner’s President and CEO, and Kevin Nowlan, BorgWarner’s CFO, and will operate as
BorgWarner. The combined company will be headquartered in Auburn Hills, Michigan.
Preliminary Full Year 2019 Financial Results
In a separate press release issued today, BorgWarner announced preliminary full year 2019
financial results, which is available on the “Investor Relations” section of the BorgWarner website
at http://www.borgwarner.com/investors. BorgWarner will issue a press release and hold a
conference call to discuss its fourth quarter and full year 2019 financial results on February 13,
2020.
In a separate press release also issued today, Delphi Technologies announced preliminary full
year 2019 financial results, which is available on the “Investor Relations” section of the Delphi
Technologies website at http://ir.delphi.com. Delphi Technologies file its Form 10-K on February
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13, 2020, and in light of today’s transaction will not be holding its previously scheduled earnings
call.
Advisors
BofA Securities, Inc. and Rockefeller Financial LLC acted as financial advisors to BorgWarner
and Simpson Thacher & Bartlett LLP acted as its legal advisor. Goldman Sachs International
acted as financial advisor to Delphi Technologies and Kirkland & Ellis LLP acted as its legal
advisor.
Transaction Conference Call
BorgWarner and Delphi Technologies will host a conference call today, at 8:00 a.m. ET to discuss
the transaction. The conference call can be accessed by dialing (877) 658-9096 (U.S. / Canada)
or (602) 563- 8733 (International) and giving the passcode 8997486. A replay of the call will be
available from January 28, 2020 until February 4, 2020 by dialing (855) 859-2056 (U.S. / Canada)
or (404) 537-3406 (International) and giving the passcode 8997486.
A live webcast of the conference call will be available on the investor relations sections of
BorgWarner’s and Delphi Technologies’ websites at http://www.borgwarner.com and
http://ir.delphi.com/investors.
Presentation Materials
Associated presentation materials and an infographic regarding the transaction are available on
the investor relations section of each company’s website at http://www.borgwarner.com/investors
and http://ir.delphi.com as well as a joint transaction website at
http://www.LeadingPropulsion.com.
About BorgWarner
BorgWarner Inc. (NYSE: BWA) is a global product leader in clean and efficient technology
solutions for combustion, hybrid and electric vehicles. With manufacturing and technical facilities
in 67 locations in 19 countries, the company employs approximately 30,000 worldwide. For more
information, please visit borgwarner.com.
About Delphi Technologies
Delphi Technologies is a global provider of propulsion technologies that make vehicles drive
cleaner, better and further. It offers pioneering solutions for internal combustion engine, hybrid
and electric passenger cars and commercial vehicles. Delphi Technologies builds on its Original
Equipment expertise to provide leading service solutions for the aftermarket. Headquartered in
London (UK), the company operates technical centers, manufacturing sites, customer support
service centers in 24 countries and employs more than 21,000 people around the world.
Visit www.delphi.com to learn more.
No Offer or Solicitation
This communication is being made in respect of the proposed acquisition (the “proposed transaction”) of Delphi
Technologies by BorgWarner. This communication is not intended to and does not constitute an offer to sell or the
BorgWarner Inc. BorgWarner to Acquire Delphi Technologies in All-Stock Transaction to
Strengthen Propulsion Systems Leadership
borgwarner.com
solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the
solicitation of any vote or approval in any jurisdiction pursuant to the proposed transaction or otherwise, nor shall there
be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. In particular, this
communication is not an offer of securities for sale into the United States. No offer of securities shall be made in the
United States absent registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or pursuant
to an exemption from, or in a proposed transaction not subject to, such registration requirements. Any securities issued
in the proposed transaction are anticipated to be issued in reliance upon available exemptions from such registration
requirements pursuant to Section 3(a)(10) of the Securities Act. In connection with the proposed transaction, Delphi
Technologies will file certain proxy materials, which shall constitute the scheme document and the proxy statement
relating to the proposed transaction (the “proxy statement”). The proxy statement will contain the full terms and
conditions of the proposed transaction, including details with respect to the Delphi Technologies shareholder vote in
respect of the proposed transaction. Any decision in respect of, or other response to, the proposed transaction should
be made only on the basis of the information contained in the proxy statement.
Participants in the Solicitation
Delphi Technologies, BorgWarner and certain of their respective directors, executive officers and employees may be
deemed “participants” in the solicitation of proxies from Delphi Technologies shareholders in respect of the proposed
transaction. Information regarding the foregoing persons, including a description of their direct or indirect interests, by
security holdings or otherwise, will be set forth in the proxy statement and any other relevant documents to be filed with
the Securities and Exchange Commission (the “SEC”). You can find information about Delphi Technologies’ directors
and executive officers in its Annual Report on Form 10-K for the fiscal year ended December 31, 2018, its definitive
proxy statement filed with the SEC on Schedule 14A on March 15, 2019, and certain of Delphi Technologies’ Current
Reports on Form 8-K filed with the SEC on January 7, 2019 and July 30, 2019. You can find information about
BorgWarner’s directors and executive officers in its Annual Report on Form 10-K for the fiscal year ended December
31, 2018 and its definitive proxy statement filed with the SEC on Schedule 14A on March 15, 2019.
Additional Information and Where to Find It
This communication may be deemed solicitation material in respect of the proposed transaction. In connection with the
proposed transaction, Delphi Technologies will file with the SEC and furnish to Delphi Technologies’ shareholders a
proxy statement and other relevant documents. This communication does not constitute a solicitation of any vote or
approval. Before making any voting decision, Delphi Technologies’ shareholders are urged to read the proxy statement
and any other relevant documents filed or to be filed with the SEC in connection with the proposed transaction or
incorporated by reference in the proxy statement (if any) carefully and in their entirety when they become available
because they will contain important information about the proposed transaction and the parties to the proposed
transaction.
Investors will be able to obtain free of charge the proxy statement and other documents filed with the SEC at the SEC’s
website at http://www.sec.gov. In addition, the proxy statement and Delphi Technologies’ and BorgWarner’s respective
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those
reports filed or furnished pursuant to section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934, as amended,
are available free of charge through Delphi Technologies’ and BorgWarner’s websites at www.delphi.com and
www.borgwarner.com, respectively, as soon as reasonably practicable after they are electronically filed with, or
furnished to, the SEC.
Forward-Looking Statements
This communication may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation
Reform Act that reflect, when made, Delphi Technologies’ or BorgWarner’s respective current views with respect to
future events, including the proposed transaction, and financial performance or that are based on their respective
management’s current outlook, expectations, estimates and projections, including with respect to the combined group
following the proposed transaction, if completed. Such forward-looking statements are subject to many risks,
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uncertainties and factors relating to Delphi Technologies’ or BorgWarner’s respective operations and business
environment, which may cause the actual results of Delphi Technologies or BorgWarner to be materially different from
those indicated in any future results. All statements that address future operating, financial or business performance or
Delphi Technologies’ or BorgWarner’s respective strategies or expectations are forward-looking statements. In some
cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “could,”
“designed,” “effect,” “evaluates,” “forecasts,” “goal,” “guidance,” “initiative,” “intends,” “pursue,” “seek,” “target,” “when,”
“will,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or
“continue,” the negatives thereof and other comparable terminology. Factors that could cause actual results to differ
materially from these forward-looking statements include, but are not limited to, the possibility that the proposed
transaction will not be pursued; failure to obtain necessary regulatory approvals or required financing or to satisfy any
of the other conditions to the proposed transaction; adverse effects on the market price of Delphi Technologies’
ordinary shares or BorgWarner’s shares of common stock and on Delphi Technologies’ or BorgWarner’s operating
results because of a failure to complete the proposed transaction; failure to realize the expected benefits of the
proposed transaction; failure to promptly and effectively integrate Delphi Technologies’ businesses; negative effects
relating to the announcement of the proposed transaction or any further announcements relating to the proposed
transaction or the consummation of the proposed transaction on the market price of Delphi Technologies’ ordinary
shares or BorgWarner’s shares of common stock; significant transaction costs and/or unknown or inestimable liabilities;
potential litigation associated with the proposed transaction; general economic and business conditions that affect the
combined group following the consummation of the proposed transaction; changes in global, political, economic,
business, competitive, market and regulatory forces; changes in tax laws, regulations, rates and policies; future
business acquisitions or disposals; competitive developments; and the timing and occurrence (or non-occurrence) of
other events or circumstances that may be beyond Delphi Technologies’ or BorgWarner’s control.
For additional information about these and other factors, see the information under the caption “Risk Factors” in Delphi
Technologies’ most recent Annual Report on Form 10-K filed with the SEC and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” filed on February 21, 2019, and the information under the
caption “Risk Factors” in BorgWarner’s most recent Annual Report on Form 10-K filed with the SEC and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” on February 19, 2019.
Delphi Technologies’ and BorgWarner’s forward-looking statements speak only as of the date of this communication or
as of the date they are made. Delphi Technologies and BorgWarner each disclaim any intent or obligation to update or
revise any “forward looking statement” made in this communication to reflect changed assumptions, the occurrence of
unanticipated events or changes to future operating results over time, except as may be required by law. All
subsequent written and oral forward-looking statements attributable to Delphi Technologies, BorgWarner or their
respective directors, executive officers or any person acting on behalf of any of them are expressly qualified in their
entirety by this paragraph.
General
The release, publication or distribution of this communication in or into certain jurisdictions may be restricted by the
laws of those jurisdictions. Accordingly, copies of this communication and all other documents relating to the proposed
transaction are not being, and must not be, released, published, mailed or otherwise forwarded, distributed or sent in,
into or from any such jurisdictions. Persons receiving such documents (including, without limitation, nominees, trustees
and custodians) should observe these restrictions. Failure to do so may constitute a violation of the securities laws of
any such jurisdiction. To the fullest extent permitted by applicable law, the companies involved in the proposed
transaction disclaim any responsibility or liability for the violations of any such restrictions by any person.
Any response in relation to the proposed transaction should be made only on the basis of the information contained in
the proxy statement and other relevant documents. Delphi Technologies shareholders are advised to read carefully the
formal documentation in relation to the proposed transaction once the proxy statement and other relevant documents
have been dispatched.
CONTACTS
BorgWarner
IR contact:
Patrick Nolan
BorgWarner Inc. BorgWarner to Acquire Delphi Technologies in All-Stock Transaction to
Strengthen Propulsion Systems Leadership
borgwarner.com
Phone: +1 248-754-0884
Email: ir@borgwarner.com
PR contact:
Michelle Collins
Phone: +1 248-754-0449
Email: mediacontact@borgwarner.com
Delphi Technologies
IR contact:
Sherief Bakr
Phone: +44 7557 895 781
Email: sherief.ba[email protected]
PR contact:
Kristen Kinley (Global/ Americas)
Phone: +1 248 535-3930
Email: kristen.kinl[email protected]
