Battle for Haldex going into next round

Component specialist ZF has raised its offer for Swedish company Haldex to 4.86 billion crowns (€508 million), matching a rival bid from Germany's Knorr-Bremse.

Haldex’s Board unanimously backed ZF's renwed offer, saying on Wednesday it was less likely to be scuppered by anti-trust regulators although both companies were now offering the same amount of money.

According to Haldex, the Board concluded that the offer by ZF provides the Haldex shareholders with “significantly greater deal certainty” than Knorr-Bremse’s bid.

“There is limited overlap between the businesses of Haldex and ZF, and ZF has already made the necessary competition law filings and the Board expects that ZF’s offer will promptly obtain all required competition law clearances and approvals,” the company said in a statement.

“In contrast, there are significant overlaps across the businesses of Haldex and Knorr-Bremse, and the completion of Knorr-Bremse’s offer is subject to the receipt of approvals from several competition authorities on terms that are acceptable to Knorr-Bremse.”

It added, “In the Board’s opinion, which is based on advice from its legal advisers, there is a significant risk that Knorr-Bremse’s offer may require a lengthy review – potentially lasting 6 months or more – by the relevant competition authorities which would be disruptive to the business of Haldex, and there is considerable uncertainty whether the transaction will close at all.

“On this basis, the Board unanimously recommends the Haldex shareholders not to accept the offer by Knorr-Bremse.”

Quoting “people close to the situation”, newswire Reuters reported Knorr-Bremse is considering raising its bid, with the sweetened offer expected to be put forward within days.

“Haldex's shares were up 1.3 percent [on Wednesday], suggesting investors are hopeful of a still higher offer,” Reuters speculated.

“Even if Knorr-Bremse were to win in the bidding it would have to deal with ZF as a major Haldex shareholder, who might seek to influence strategic decisions such as potential antitrust-related divestments, people close to the matter said.”

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