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 October 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.
As the commercial vehicle industry advances toward a vision for fully-autonomous vehicles, WABCO is increasingly mobilizing levels of vehicle intelligence and connectivity to help enable safer and more productive trucks, buses and trailers. With this consolidation of its business organization and broader access to market in North America, WABCO will further strengthen its relationships with commercial vehicle manufacturers and fleets through more simplified and direct channels. Operating fully under the WABCO brand, the local business will become even more agile, efficient and customer-focused.
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, Kentucky. In addition, WABCO will continue to have exclusive access to a winter test track in Sault St. Marie, MI, and joint access to a year-round test track in East Liberty, OH to support local customers.
The agreement to take full control of the joint-venture business will enable WABCO to offer its consolidated portfolio of products and systems including its industry-leading wheel-end solutions, air disc brakes, autonomous braking, electronic stability and active steering control systems, alongside advanced driver assistance systems (ADAS) and a full range of aerodynamic, air management and transmission automation control products in North America.
Following closure of the buyout, WABCO 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.
