AUBURN HILLS, Mich. and
LONDON, May
6, 2020 /PRNewswire/ -- BorgWarner Inc. (NYSE: BWA) and
Delphi Technologies PLC (NYSE: DLPH) today announced that the
companies have amended certain terms of the definitive transaction
agreement they originally entered into on January 28, 2020 under which BorgWarner will
acquire Delphi Technologies in an all-stock transaction. The
amendment represents a resolution to BorgWarner's previously stated
assertion that Delphi Technologies materially breached the
definitive transaction agreement by drawing down on its full
$500 million revolving credit
facility, which Delphi Technologies disputed on the basis that
BorgWarner unreasonably withheld and conditioned its consent.
Under the terms of the amendment, which has been approved by the
boards of directors of both companies, BorgWarner consents to
Delphi Technologies' recent draw down of its revolver. The amended
transaction agreement also provides for new closing conditions
requiring that, at the time of the transaction closing, the total
amount of Delphi Technologies' outstanding revolver borrowings do
not exceed $225 million, and net of
its cash balances, do not exceed $115
million, and its net debt-to-adjusted EBITDA ratio does not
exceed a specified threshold. As part of resolving the dispute, the
parties have also agreed to a revised exchange ratio pursuant to
which Delphi Technologies' shareholders will receive 0.4307 shares
of BorgWarner common stock for each Delphi Technologies share. This
represents a 5% reduction in the exchange ratio relative to the
exchange ratio contained in the original agreement. In accordance
with the amended terms, current BorgWarner and Delphi Technologies
shareholders would own approximately 85% and 15%, respectively, of
the outstanding shares of the combined company following completion
of the transaction. All other terms and conditions of the original
definitive transaction agreement remain substantially the same.
BorgWarner does not believe the revised exchange ratio or the
potential for additional indebtedness at Delphi Technologies at the
closing materially alters its views on the expected leverage ratio
or the financial outlook of the combined company. BorgWarner
intends to provide an update on the overall financial profile and
outlook for the combined company at or around the time of
closing.
The integration planning teams continue to work diligently
toward the closing of the transaction, which is expected to occur
in the second half of 2020, subject to the approval by Delphi
Technologies' shareholders, receipt of required regulatory
approvals and satisfaction or waiver of other closing
conditions.
Advisors
BofA Securities and Rockefeller Financial LLC acted as financial
advisors to BorgWarner, and Simpson Thacher & Bartlett LLP
acted as its legal advisor. Goldman Sachs International acted as
financial advisor to Delphi Technologies, and Kirkland & Ellis
LLP acted as its legal advisor.
About BorgWarner
BorgWarner Inc. (NYSE: BWA) is a global product leader in clean
and efficient technology solutions for combustion, hybrid and
electric vehicles. With manufacturing and technical facilities in
67 locations in 19 countries, the company employs approximately
29,000 worldwide. For more information, please visit
borgwarner.com.
About Delphi Technologies
Delphi Technologies is a global provider of propulsion
technologies that make vehicles drive cleaner, better and further.
It offers pioneering solutions for internal combustion engine,
hybrid and electric passenger cars and commercial vehicles. Delphi
Technologies builds on its Original Equipment expertise to provide
leading service solutions for the aftermarket. Headquartered in
London (UK), the company operates
technical centers, manufacturing sites, customer support service
centers in 24 countries and employs more than 21,000 people around
the world. Visit www.delphi.com to learn more.
No Offer or Solicitation
This communication is being made in respect of the proposed
acquisition of Delphi Technologies by BorgWarner. This
communication is not intended to and does not constitute an offer
to sell or the solicitation of an offer to subscribe for or buy or
an invitation to purchase or subscribe for any securities or the
solicitation of any vote or approval in any jurisdiction pursuant
to the proposed transaction or otherwise, nor shall there be any
sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. In particular, this communication
is not an offer of securities for sale into the United States. No offer of securities
shall be made in the United States
absent registration under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), or pursuant to an exemption from,
or in a transaction not subject to, such registration requirements.
Any securities issued in the proposed transaction are anticipated
to be issued in reliance upon available exemptions from such
registration requirements pursuant to Section 3(a)(10) of the
Securities Act.
Participants in the Solicitation
Delphi Technologies, BorgWarner and certain of their respective
directors, executive officers and employees may be deemed
"participants" in the solicitation of proxies from Delphi
Technologies shareholders in respect of the proposed transaction.
Information regarding the foregoing persons, including a
description of their direct or indirect interests, by security
holdings or otherwise, is set forth in the preliminary proxy
statement filed on Schedule 14A with the Securities and Exchange
Commission (the "SEC") on March 11,
2020 (the "preliminary proxy statement") and will be set
forth in a definitive proxy statement and any other relevant
documents to be filed with the SEC. You can find information about
Delphi Technologies' directors and executive officers in its Annual
Report on Form 10-K and Form 10-K/A for the fiscal year ended
December 31, 2019 and its definitive
proxy statement filed with the SEC on Schedule 14A on March 15, 2019. You can find information
about BorgWarner's directors and executive officers in its Annual
Report on Form 10-K for the fiscal year ended December 31, 2019 and its definitive proxy
statement filed with the SEC on Schedule 14A on March 20, 2020.
Additional Information and Where to Find It
This communication may be deemed solicitation material in
respect of the proposed transaction. In connection with the
proposed transaction, Delphi Technologies filed with the SEC the
preliminary proxy statement, and Delphi Technologies will file with
the SEC and furnish to its shareholders a definitive proxy
statement on Schedule 14A and other relevant documents. This
communication does not constitute a solicitation of any vote or
approval. Before making any voting decision, Delphi Technologies'
shareholders are urged to read the proxy statement and any other
relevant documents filed or to be filed with the SEC in connection
with the proposed transaction or incorporated by reference in the
proxy statement carefully and in their entirety when they become
available because they contain or will contain important
information about the proposed transaction and the parties to the
proposed transaction.
Investors are able to obtain free of charge the preliminary
proxy statement, the definitive proxy statement and other documents
filed with the SEC (when available) at the SEC's website at
http://www.sec.gov. In addition, the preliminary proxy statement,
the definitive proxy statement and Delphi Technologies' and
BorgWarner's respective annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and amendments to
those reports filed or furnished pursuant to section 13(a) or 15(d)
of the U.S. Securities Exchange Act of 1934, as amended, are
available free of charge through Delphi Technologies' and
BorgWarner's websites at www.delphi.com and
www.borgwarner.com, respectively, as soon as reasonably practicable
after they are electronically filed with, or furnished to, the
SEC.
Notice Regarding Forward-Looking Statements
This communication may contain forward-looking statements as
contemplated by the 1995 Private Securities Litigation Reform Act
that reflect, when made, Delphi Technologies' or BorgWarner's
respective current views with respect to future events, including
the proposed transaction, and financial performance or that are
based on their respective management's current outlook,
expectations, estimates and projections, including with respect to
the combined company following the proposed transaction, if
completed. Such forward-looking statements are subject to many
risks, uncertainties and factors relating to Delphi Technologies'
or BorgWarner's respective operations and business environment,
which may cause the actual results of Delphi Technologies or
BorgWarner to be materially different from those indicated in the
forward-looking statements. All statements that address future
operating, financial or business performance or Delphi
Technologies' or BorgWarner's respective strategies or expectations
are forward-looking statements. In some cases, you can identify
these statements by forward-looking words such as "may," "might,"
"will," "should," "could," "designed," "effect," "evaluates,"
"forecasts," "goal," "guidance," "initiative," "intends," "pursue,"
"seek," "target," "when," "will," "expects," "plans," "intends,"
"anticipates," "believes," "estimates," "predicts," "projects,"
"potential," "outlook" or "continue," the negatives thereof and
other comparable terminology. Factors that could cause actual
results to differ materially from these forward-looking statements
include, but are not limited to, the possibility that the proposed
transaction will not be pursued; failure to obtain necessary
shareholder approvals, regulatory approvals or required financing
or to satisfy any of the other conditions to the proposed
transaction; adverse effects on the market price of Delphi
Technologies' ordinary shares or BorgWarner's shares of common
stock and on Delphi Technologies' or BorgWarner's operating results
because of a failure to complete the proposed transaction; failure
to realize the expected benefits of the proposed transaction;
failure to promptly and effectively integrate Delphi Technologies'
businesses; negative effects relating to the announcement of the
proposed transaction or any further announcements relating to the
proposed transaction or the consummation of the proposed
transaction on the market price of Delphi Technologies' ordinary
shares or BorgWarner's shares of common stock; significant
transaction costs and/or unknown or inestimable liabilities;
potential litigation associated with the proposed transaction;
general economic and business conditions that affect the combined
company following the consummation of the proposed transaction;
changes in global, political, economic, business, competitive,
market and regulatory forces; changes in tax laws, regulations,
rates and policies; future business acquisitions or disposals;
competitive developments; and the timing and occurrence (or
non-occurrence) of other events or circumstances that may be beyond
Delphi Technologies' or BorgWarner's control.
For additional information about these and other factors, see
the information under the caption "Risk Factors" in Delphi
Technologies' most recent Annual Report on Form 10-K filed with the
SEC and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" filed on February 13, 2020, and the information under the
caption "Risk Factors" in BorgWarner's most recent Annual Report on
Form 10-K filed with the SEC and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on
February 13, 2020.
Delphi Technologies' and BorgWarner's forward-looking statements
speak only as of the date of this communication or as of the date
they are made. Delphi Technologies and BorgWarner each disclaim any
intent or obligation to update or revise any "forward looking
statement" made in this communication to reflect changed
assumptions, the occurrence of unanticipated events or changes to
future operating results over time, except as may be required by
law. All subsequent written and oral forward-looking statements
attributable to Delphi Technologies, BorgWarner or their respective
directors, executive officers or any person acting on behalf of any
of them are expressly qualified in their entirety by this
paragraph.
General
The release, publication or distribution of this communication
in or into certain jurisdictions may be restricted by the laws of
those jurisdictions. Accordingly, copies of this communication and
all other documents relating to the proposed transaction are not
being, and must not be, released, published, mailed or otherwise
forwarded, distributed or sent in, into or from any such
jurisdictions. Persons receiving such documents (including, without
limitation, nominees, trustees and custodians) should observe these
restrictions. Failure to do so may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies involved in the proposed
transaction disclaim any responsibility or liability for the
violations of any such restrictions by any person.
Any response in relation to the proposed transaction should be
made only on the basis of the information contained in the proxy
statement and other relevant documents. Delphi Technologies
shareholders are advised to read carefully the formal documentation
in relation to the proposed transaction once the proxy statement
and other relevant documents have been dispatched.
CONTACTS
BorgWarner
IR contact:
Patrick
Nolan
Phone: +1 248-754-0884
Email: ir@borgwarner.com
PR contact:
Michelle
Collins
Phone: +1 248-754-0449
Email: mediacontact@borgwarner.com
Delphi Technologies
IR contact:
Sherief
Bakr
Phone: +44 7557 895 781
Email: sherief.bakr@delphi.com
PR contact:
Kristen
Kinley (Global/ Americas)
Phone: +1 248 535-3930
Email: kristen.kinley@delphi.com
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SOURCE BorgWarner