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The eBearing News
March 30, 2000
Thyssen Krupp AG Makes Offer
for Mannesmann's Atecs Unit
copyright © 2000 eBearing Inc.
Late last week, Thyssen Krupp AG made a last minute, surprise unsolicited bid of
€ 7.5 billion (USD $7.3 billion) for the Atecs unit of Mannesmann AG (Bonn,
Germany). The bid came just days before Mannesmann's supervising board was to give its
formal approval to a joint venture of Siemens AG and the VDO unit of Atecs, forming Atecs
Siemens Automotive AG.
Thyssen Krupp's bid is an attempt to thwart a complex string of events ranging
from the spinoff of Atecs Mannesmann AG, that planned merger of the Atecs VDO business
with Siemens Automotive AG and an IPO of the entire Atecs unit due later in 2000.
Some insiders believe that Mannesmann sensed Thyssen planned to make an offer and
tried to hasten the Atecs / Siemens joint venture agreement. Had the venture
been completed, Thyssen Krupp would have had a very difficult time acquiring Atecs.
Sachs Automotive of America is a leading manufacturer of OEM clutches and release
bearings, part of Atecs Mannesmann AG, the industrial arm of the Mannesmann Group.
[click here to read the previous article about Mannesmann's Atecs spinoff]
Mannesmann's supervising board was expected to formally approve the Siemens venture
at its meeting on Friday March 24th. Instead, the surprise bid by Thyssen arrived
and the board postponed the decision. The board will consider the Thyssen offer at this
week's meeting on March 31, 2000.
The series of events leading up to the Thyssen Krupp bid is a long and somewhat
convoluted story of mergers, ventures, spinoffs and IPOs, 21st century style.
Mannesmann AG is an engineering company with significant telecommunications assets. In
February, Vodafone AirTouch PLC won an acquisition battle for Mannesmann, which will
result in a merger of the two European telephone titans. Vodafone AirTouch now owns
95% of Mannesmann's shares, but the European Union still has to approve the merger.
Before the acquisition by Vodafone, Mannesmann had already planned to become
a strictly telecommunications company by spinning off its five other businesses to
a new entity, Atecs Mannesmann AG. Atecs would have had total worldwide sales in the
neighborhood of USD 12 billion. The five companies making up Atecs are VDO North America
LLC (Winchester, Virginia), Sachs Automotive of America, Rexroth, Dematic and Demag
Kraus-Maffei. The proposed joint venture with Siemens AG would have paired Siemens
Automotive and with the Atecs VDO unit, to be called Atecs Siemens Automotive AG.
An IPO for Atecs had been scheduled for mid-2001, but after the Vodafone takeover,
it was rescheduled for a Frankfurt IPO this June 2000.
Mannesmann had originally hoped to raise as much as € 11 billion ($10.7 billion)
from the Atecs IPO, but recent valuations put the number closer to € 7 billion ($6.8 billion).
The Thyssen Krupp opening bid of € 7.5 billion ($7.3 billion)
forced the board to consider it, but some sources belive the ultimate price could be
pushed as high as € 9 billion ($8.75 billion).
Disrupting the Siemens joint venture is a key step for Thyssen Krupp in its bid to
become a more complete supplier of complete automotive systems. It is also a significant
victory for Thyssen because everything about the Atecs VDO / Siemens joint venture had
been decided and was actually in process - from the price tag all the way down to where
the corporate headquarters would be located in Frankfurt to the management team.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
trademarks of eBearing Inc.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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