WABCO Holdings announced it will further expand its operations in the commercial vehicle market in North America by taking full ownership of the Meritor WABCO joint venture.
WABCO has signed an agreement to purchase Meritor Inc.’s stake in the joint venture business. WABCO’s purchase price is $250 million. The transaction is expected to close on Oct. 1, 2017 and immediately prior to closing, Meritor will receive a final closing partnership distribution.
Meritor WABCO, employing approximately 200 persons, is headquartered in Troy, MI, and had sales of $300 million in fiscal year 2016. It currently sells and distributes a range of WABCO’s safety and efficiency technologies for commercial vehicles in North America.
“The acquisition of the remaining stake in Meritor WABCO furthers our commitment to expand our presence in North America,” said Jacques Esculier, WABCO chairman and CEO. “By unifying our North America team, WABCO can unlock further value for our customers, including offering them seamless access to WABCO’s powerful technology and services portfolio, backed by the flexibility and efficiency of an integrated global supply chain.”
“We strive to continually improve WABCO’s capability to serve commercial vehicle makers and fleets in North America, enabling delivery of goods and transportation of people as safely and efficiently as ever,” said Jon Morrison, WABCO president, Americas. “By combining our organization under one brand and leadership structure, we can leverage and deploy, here in North America, the full breadth of WABCO’s leading technology portfolio to serve customers directly - as we do in the rest of the world.”
With this agreement, WABCO will take over the former joint venture’s application engineering and supply chain operations, including the distribution center and customer service hub in Hebron, KY. In addition, WABCO noted it will continue to have access to a winter test track in Sault St. Marie, MI, and joint access to a year-round test track in East Liberty, OH.
Following closure of the buyout, WABCO reported it has agreed for Meritor to continue to be its exclusive distributor for a certain range of WABCO’s Aftermarket products in the U.S. and Canada, and its non-exclusive distributor in Mexico. In connection with the purchase transaction, both parties have the option to terminate the distribution arrangements at certain points during the first three and half years, for an exercise price between $225 million and $265 million based on the earnings of the business.