The U.S. Federal Trade Commission conditioned its approval of ZF’s TRW takeover on the buyer’s sale of the target company’s Linkage and Suspension business.

ZF Gets FTC Green Light on TRW Takeover

May 5, 2015
U.S. agency approves auto-parts merger, pending asset sell-off Est. $11.7-billion deal Driveline, chassis parts Active and passive safety systems

The U.S. Federal Trade Commission has approved ZF Friedrichshafen AG’s planned acquisition TRW Automotive Holdings Corp., a all-cash deal announced last fall and valued then at approximately $11.7 billion. The German auto parts manufacturer would incorporate the Detroit-based developer of automotive safety systems, though the FTC established certain conditions to the proposed combination.

ZF intends to form a new global auto parts manufacturing organization with the addition of TRW, emphasizing that the two firms have complementary product lines: ZF produces driveline and chassis technologies; TRW develops active and passive safety technologies, including advanced driver assistance systems.

Together, the two companies have total annual sales estimated at over $38.8 billion, and 138,000 employees worldwide.

To gain FTC's clearance ZF agreed to unload TRW's Linkage and Suspension business, a sale is currently underway. 

The acquisition is still awaiting approval by antitrust authorities in Mexico, but in its announcement ZF said that clearance would be forthcoming “shortly”.

The TRW acquisition is expected to close later this month, according to ZF.

After the combination, TRW would be a separate business division of ZF. The consolidation would be focused on “cost synergies” derived by enhanced purchasing power and sharing “best practices,” ZF stated last fall.

The combined company would generate about half of its sales in Europe and half in the rest of the world. The ZF organization has 12 manufacturing sites in North America, including a new automatic transmission system complex in South Carolina, an axle drives plant in Michigan, and chassis components plants in Alabama, Michigan, and the Carolinas.