BorgWarner to buy parts supplier Remy - The Detroit News
for $951 million in cash, driving further consolidation of the auto-parts industry. BorgWarner will pay $29. 50 a share, a 44 percent premium from Remy’s closing price on Friday, according to a statement Monday. The price indicates an enterprise value of about $1. 2 billion, BorgWarner said. The maker of turbochargers and transmission parts said the deal is set to close in the fourth quarter and should add to earnings in the first year because of purchasing efficiencies and other savings. Demand for fuel-saving technology and global scale is pushing auto-parts makers to consolidate. “Our main focus has been organic growth, and that remains a prime path for us,” James Verrier, chief executive officer of BorgWarner, said on a conference call. BorgWarner rose 2. 3 percent to $54. 87 at 3 p. m. Monday, as Remy soared 8. 8 percent to $29. 33. This year through Friday, Remy had fallen 1. 9 percent and BorgWarner had declined 2. 4 percent. Turbochargers, a key product for Auburn Hills-based BorgWarner, compress air to maximize the power an engine produces. Buying Remy will add alternators, starters and hybrid motors, giving BorgWarner the ability to benefit as more powertrains blend electric power with traditional gasoline-fueled technology. Source: www.detroitnews.com
