BorgWarner acquires Delphi Technologies to hold grip into the Electrified Powertrain for EVs

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BorgWarner acquires Delphi Technologies in $3.3 billions

BorgWarner acquires Delphi: The automobile sector is going through a major transformation and this could take further more years from now to see this industry have some stabilities. To adopt the changes happening within the industry BorgWarner decided to take over the Delphi Technology. 

On January 28, 2020, BorgWarner and Delphi Technologies announced that both the companies have entered into an agreement under which BorgWarner will take over the Delphi Technologies. After this agreement, current BorgWarner stockholders are expected to own approximately 84% of the combined company, while current Delphi Technologies stockholders are expected to own approximately 16%.

BorgWarner

BorgWarner Inc. is a global product leader in the field of Power transmission system for IC Engine Vehicles, Hybrid and Electric Vehicles. The company has manufacturing and technical facilities in 67 different locations in 19 countries. In addition, Around 30,000 employees around the world makes BorgWarner one of the major player in the technology component manufacturing sector of the automotive Industry.

Delphi Technologies

Delphi Technologies is a Gillingham, U.K based technology and part manufacturing company formed in the 2017. The company designs, develops and manufactures powertrain technologies for different automotive OEMs around the world. Earlier the Delphi Technologies were known as Delphi Automotive but later the Delphi Automotive divided into two different companies– 1) Delphi Technologies and 2) Aptive PLC. Now Aptiv is completely involved in the development of safety systems and autonomous vehicle softwares.

BorgWarner & Delphi Technologies merger

The BorgWarner was in the plan to have some shares in the future automobile market and that was possible only by making more investment in the development of electrified and autonomous vehicle technology or by acquiring the company which holds a good grip in the same.

“By 2023, we estimate the breakdown of pro forma BorgWarner will be 63% in combustion, 29% in hybrid and 8% in electric,” said Borg CEO Frederic Lissalde on the company’s acquisition conference call Tuesday. “This 8% in electric would represent a 30% increase in BorgWarner’s stand alone exposure to the electric market.” Delphi improves Borg’s vehicle electrification portfolio.

“We were impressed by the electronics know-how overall and the scale of the talent, the capabilities on the electronics,” added Lissalde. “Delphi Technologies really ahead of the curve. I think they’re a year advanced than others.”

The future of this agreement

In present time BorgWarner was having diversified work portfolio. The company was supplying transmission products to companies, including Ford, Volkswagen and many others. Apart from that BorgWarner was also working on the power-electronics of electric vehicles and hybrid transmission systems.

In fiscal year 2019, the BorgWarner had sales of $10.17 billion, while Delphi had sales of $4.36 billion. Now,after this acquisition company will grow the business in electrified powertrain. The global EV sale will grow 8 to 9% (expected). So, electrified powertrain demand will increase in the market.

BorgWarner: Solution to increase the efficiency

Department mergers and changes will also happen within the organization. This will give a fresh chance to focus on the product development for gasoline as well as electric cars.

During the Press Conference at IAA Frankfurt in September 2019, the CEO of BorgWarner Frédéric Lissalde shows his interest to help the OEMs to increase the efficiency of the electrified powertrain systems. BorgWarner is already working on electric motor, battery heating-up and other electric vehicle system. This new business extension with the Delphi Technologies will further boost the compay’s work.

My Words

The business of BorgWarner will expand. Delphi’s work in the area of 48V electrified system will further boost the BorgWarner’s capabilities. Apart from that the BorgWarner will utilize the electrified powertrain expertise of Delphi in their future projects.