ZF Agrees to Buy TRW for $11.7 Billion

Germany's ZF Friedrichshafen AG has reached agreement to buy TRW Automotive Holdings Corp. at $105.60 per share. The all-cash deal is worth $11.7 billion.

Safety systems supplier TRW says the sale is worth about $13.5 billion on an enterprise value basis. The companies expect the sale to close in the first half of 2015.

The merger will create the world's second-largest auto supplier (after Robert Bosch GmbH and ahead of Denso Corp.) with some 138,000 employees and $41 billion in sales worldwide.

Chassis and driveline systems maker ZF says the deal will help the combined companies pursue the electric vehicle, connected car and driverless vehicle markets.

ZF cleared a looming antitrust hurdle earlier today by arranging to sell its 50% stake in a steer-system venture with Robert Bosch GmbH. The partnership competes with TRW's own steering business.

TRW will operate as a new division of ZF. Because the businesses of the two companies complement rather than compete, ZF expects cost savings will come mainly through greater purchasing power.

ZF says the acquisition will enable it to more than double sales in China and the U.S. to $5.5 billion and $9.0 billion, respectively.