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TRW Automotive Holdings Corp. (NYSE:TRW) To Be Acquired By Germany’s ZF Friedrichshafen AG For $11.7 Billion

Boston, MA 09/16/2014 (wallstreetpr) – Germany based ZF Friedrichshafen AG agreed to take over TRW Automotive Holdings Corp. (NYSE:TRW) in a deal worth approximately $11.7 billion. In what would be called the second biggest automotive supplier of the world in terms of sales, the combined company shall cater to a huge car segment.

The New Automotive Industry Powerhouse in the Making

The announcement of this acquisition established a fact that the U.S. based TRW Automotive Holdings Corp. (NYSE:TRW) stands at a number 2 position, only after Germany-based Robert Bosch GmbH. At the third position rests Denso Corp (ADR) (OTCMKTS:DNZOY) of Japan.

After the completion of this deal, automotive industry will witness the emergence of a new powerhouse with a capability to provide employment to nearly 138,000 employees. The aim of newly combined company, as seen by the experts, will be to put to rest, the craving of technology-seeking automobile industry. From driverless cars to Internet connection, electric control to high-tech systems; the newly formed company shall be able to feed the hunger of this industry well.

Talking in the conference call, the CEO of ZF, Stefan Sommer said that the biggest motivation behind this deal is to cater to the industry with the latest technology, autonomous driving and electro-mobility.

Nitty-Gritty of the Deal

TRW shall be paid $105.60 per share price for this deal. The financial of this transaction shall be done through loan from Citigroup Inc (NYSE:C) and Deutsche Bank AG (USA) (NYSE:DB). Other banks shall also assist in financing of this deal. The deal will be finalized into agreement in first half of next year.

While TRW Automotive Holdings Corp. (NYSE:TRW) offers brilliance in making air bags, brakes and safety parts, ZF, on the other hand, specializes in steering systems as well as transmission.

The hints of this deal were given in July 2014. However, the deal was hit by a hitch in terms of concerns governing increasing competition risk.

Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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