Bosch buying JV partner in ZF Steering, makes open offer to buy 26% more for $17M

Robert Bosch GmbH has struck a deal to acquire the stake held by its equal equity joint venture partner in ZF Lenksysteme GmbH, the promoter of public listed auto parts maker ZF Steering, and has made an open offer to take a controlling stake in the Indian firm.

ZF Lenksysteme owns 25.79 per cent stake in ZF Steering and if the open offer is fully accepted Bosch would hold 51.79 per cent stake in the firm and it may have to shell out up to Rs 103.56 crore ($16.9 million) in the open offer, as per a stock market disclosure.

ZF Lenksysteme is a joint venture between German auto parts maker ZF Friedrichshafen AG and Robert Bosch GmbH which hold 50 per cent stake each in the company. Bosch has entered an agreement to buy out its partner in ZF Lenksysteme as part of a global deal for an undisclosed amount.

It manufacturers steering systems for passenger cars and commercial vehicles and employs over 13,000 people in eight countries and had sales of about $5.3 billion in 2013.

“With its complete takeover of ZFLS, Bosch is strengthening its ability to actively shape the future of mobility. The company is a technological leader in the growth area of electric power steering, and precisely this is the core technology for automated driving, for more efficient vehicles, and also for electric cars,” said Volkmar Denner, chairman of the board of management of Robert Bosch GmbH in a filing.

This triggered a mandatory open offer as Bosch gets indirect control of ZF Steering through its 25.79 per cent holding, which is higher than the trigger point of 25 per cent ownership of a listed firm.

The open offer includes acquisition of up to 2,359,058 fully paid-up equity shares at a price of Rs 439 per share, face value of Rs 10 each, representing 26 per cent of the total share capital of ZF Steering Gear on a fully diluted basis.

The open offer has been made at a huge discount to the current market price which may not allow Bosch to raise its holding to any significant extent. The share price of ZF Steering has tripled since March this year.

Citigroup Global Markets India Pvt Ltd is managing the open offer.

Robert Bosch GmbH together with its subsidiaries provides automotive, industrial, electric and processing & packaging technologies and services. The company was founded in 1886 and is head-quartered in Stuttgart, Germany.

Founded in 1981, Pune-based ZF Steering Gear India is engaged in manufacturing and supply of automotive components in India. Its manufacturing plant is located at village Vadhu Budruk, Pune, having an installed capacity of 2 lakh units of worm and roller mechanical steering gears, 2.5 lakh units of  ball and nut integral hydraulic power steering gears and 60,000 units of mechanical rack & pinion steering Gears per annum.

(Edited by Joby Puthuparampil Johnson)

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