Wabco to exit Meritor WABCO joint venture

Wabco agrees to buyout of Meritor WABCO joint venture

Stockwinners offers winning stock research and stock advisory since 1998

WABCO Holdings (WBC) announced that it will further expand its commitment and operations in the commercial vehicle market in North America by taking full ownership of the Meritor WABCO joint venture. WABCO has signed an agreement to purchase Meritor (MTOR) stake in the joint venture business.

WABCO’s purchase price is $250M. The transaction is expected to close on October 1, 2017 and immediately prior to closing, Meritor will receive a final closing partnership distribution.

Meritor WABCO, employing approximately 200 persons, is headquartered in Troy, Michigan, U.S.A. and had sales of $300M in fiscal year 2016.

It currently sells and distributes a range of WABCO’s leading safety and efficiency technologies for commercial vehicles in North America.

With this agreement, WABCO will take over the former joint venture’s application engineering and supply chain operations, including the distribution center and customer service hub in Hebron, Kentucky.

In addition, WABCO will continue to have exclusive access to a winter test track in Sault St. Marie, Michigan, and joint access to a year-round test track in East Liberty, Ohio to support local customers.

Following closure of the buyout, WABCO has agreed for Meritor to continue to be its exclusive distributor for a certain range of WABCO’s Aftermarket products in the U.S. and Canada, and its non-exclusive distributor in Mexico.

In connection with the purchase transaction, both parties have the option to terminate the distribution arrangements at certain points during the first three and half years, for an exercise price between $225M-$265M based on the earnings of the business.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Leave a Reply

Your email address will not be published. Required fields are marked *