ZF Friedrichshafen $11.7 billion takeover of TRW Automotive

Overview:

• ZF Friedrichshafen acquired TRW Automotive for $11.7 billion as it sought to increase its exposure to the US and Asia and secure new technologies. 
• German car parts manufacturer ZF's acquisition of listed US competitor TRW created the second largest automotive component manufacturer in the world by revenue.
• For ZF, acquiring TRW's automated car technology was one of the main appeals of the deal. 
• ZF paid $105.60 per share for TRW, a 16% premium on the businesses share price on the day of ZF's offer.
• Citigroup and Deutsche Bank acted as financial advisors to ZF on the acquisition and - alongside other lenders - provided the initial bridge financing for the acquisition. 
• ZF refinanced the debt it borrowed for the acquisition through a series of bond issues.
• In January 2015, ZF issued €2.2 billion schuldschiene (promissory notes) - at the time, the largest on record - in tranches with maturities of three, five and seven years.
• BayernLB and Landesbank Baden-Württemberg (LBBW) placed the schuldschiene. 
• In April 2015, ZF issued three US dollar bonds totaling $3.5 billion and two euro denominated bonds collectively worth €2.25 billion. 
• The dollar bonds were a $1 billion 4% issue which matures in 2020, a 4.5% $1 billion issue which matures in 2022, and a $1.5 billion 4.75% issue which matures in 2025. 
• The eurobonds were a €1.15 billion 2.5% issue which matures in 2019 and a €1.1 billion 2.75% issue which matures in 2023.
• Citigroup Global Markets, HSBC Securities, JPMorgan Securities, and BofA Merrill Lynch led the syndicate of initial purchasers on the dollar bond transactions.
• Deutsche Bank, Barclays Bank, BNP Paribas and Commerzbank were lead underwriters on the eurobonds.  
• Goldman Sachs was TRW's financial advisor on the businesses sale. 

Ben Naylor - Regional editor