BorgWarner (BWA) Reports Acquisition of AKASOL AG

February 16, 2021 5:56 AM EST

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BorgWarner Inc. (NYSE: BWA) and AKASOL AG (ASL) today announced that they have signed a Business Combination Agreement ("BCA") to position BorgWarner to significantly expand its commercial vehicle electrification capabilities. As part of the agreement, a wholly-owned subsidiary of BorgWarner will launch a voluntary public takeover offer at €120.00 per share in cash for all outstanding shares of AKASOL ("the Offer"). Holders of approximately 59% of AKASOL's outstanding shares have committed through Irrevocable Undertakings to accept the Offer with respect to their shares. The Offer represents a premium of approximately 23% to AKASOL's three-month volume-weighted average share price prior to announcement and values AKASOL at a total enterprise value of approximately €754 million2, which includes the assumption of €27 million of net debt.

Headquartered in Darmstadt, Germany, AKASOL designs and manufactures customizable battery packs for use in buses, commercial vehicles, rail vehicles and industrial vehicles, as well as in ships and boats. AKASOL's proprietary system technology is cell-agnostic, providing a low-cost, flexible solution to world-class customers. With more than 300 full-time employees and three facilities across Germany and one facility in the United States, AKASOL believes it is well positioned to capitalize on the large market opportunity across Europe and North America.

"AKASOL is an excellent strategic fit as BorgWarner seeks to continue to expand its electrification portfolio and capitalize on the profound industry shift towards electrification. AKASOL's manufacturing footprint and established, in-production customer base are complementary to BorgWarner's and would accelerate our foothold into the fast-growing commercial vehicle and off-highway battery pack market," said Frédéric Lissalde, President and CEO of BorgWarner. "AKASOL is highly-regarded as a reputable and reliable partner, and like us, they have a customer-first mentality and a culture of innovation and environmentally friendly technology leadership. We look forward to welcoming their incredibly talented team to BorgWarner."

BorgWarner believes the acquisition would significantly strengthen its commercial vehicle and off-highway battery systems business as it continues to execute its electrification strategy. With the global, lithium-ion battery market for electric vehicles expected to grow, AKASOL believes it is well positioned to meet the demand for battery systems in the global electric commercial vehicle market.

"The Executive Board welcomes the strategic partnership with BorgWarner, as it offers significant strategic perspectives to AKASOL," said Sven Schulz, CEO and Founder of AKASOL. "BorgWarner shares our vision of emission-free mobility, and with joint forces, we will expand AKASOL's technology and market leadership for high-performance battery systems."

Transaction TermsAs part of the agreement, a wholly-owned subsidiary of BorgWarner will launch a voluntary public takeover offer at €120.00 per share in cash for all outstanding shares of AKASOL. Both the Executive Board and Supervisory Board of AKASOL fully support the Offer.

BorgWarner has already secured commitments from the holders of approximately 59% of all outstanding shares of AKASOL via irrevocable undertakings, including from an entity controlled by Schulz.

AKASOL is expected to continue to be run independently from its Darmstadt headquarters, and BorgWarner intends to be represented on the Supervisory Board in a manner which appropriately reflects its shareholding. It is currently expected that CEO Schulz, CFO Carsten Bovenschen and CTO Stephen Raiser will continue their roles after completion of the transaction.

The Offer, which has been unanimously approved by the BorgWarner Board of Directors and the AKASOL Supervisory Board, is expected to be completed late in the second quarter of 2021, subject to the satisfaction of applicable regulatory approvals, as well as other closing conditions. The acceptance period under the Offer is expected to commence by the end of March. The Offer will contain a minimum acceptance threshold of 50% of the AKASOL shares issued plus one share that will be achieved upon the tendering of shares by the shareholders that have irrevocably committed. BorgWarner does not currently intend to enter into a domination agreement and / or profit and loss transfer agreement with AKASOL.

BorgWarner currently anticipates that the transaction will be funded primarily with existing cash balances and potentially some incremental debt. For the purpose of satisfying German "Cash Confirmation" requirements, BorgWarner intends to secure a $900 million, 364-day undrawn credit facility.

AdvisorsBofA Securities, Inc is acting as financial advisor, and Foley & Lardner LLP and Freshfields Bruckhaus Deringer are providing legal advice to BorgWarner. Berenberg is acting as financial advisor and Hogan Lovells is acting as legal advisor to AKASOL.

Transaction Presentation A supplemental presentation regarding the transaction is available on the investor relations section of BorgWarner's website at https://www.borgwarner.com/investors.



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