Acquisition no longer an issue: Knorr-Brems retreating hella

Wednesday 07 July 2021

Acquisition is no longer an issue
Knorr-Brems retreating hella

The family business officially threw its hat into the ring just a week ago. Now truck and train brake maker Knorr-Brems is abandoning the acquisition of headlight specialist Hella. The return of Knorr-Brems is leading to a more than two percent drop in Hella shares.

Munich-based brake company Knorr-Brems is pulling out of the race for headlight specialist Hella. The management board had come to the conclusion that the automotive supplier’s prospects from Lipstad, key technologies and products could not be easily transferred to its own portfolio in rail and truck technology that the acquisition would eventually pay off, Knorr-Brems explained.

Only a week ago, the family business officially threw its hat into the ring. It was then confirmed that the Hela majority owners, the Heuk and Roppke family, were looking for a buyer for their 60 percent stake, valued at four billion euros. Knorr-Brems’ withdrawal pushed Hela’s shares up 2.3 percent in Lang & Schwarz trading. According to insiders, French competitors Foracea and Plastic Omnium are also interested in a stake in Hella.

Financial investors should also check out Hella. Investment bank Rothschild, which has been tasked with finding a buyer, is looking to narrow the field of bidders soon, according to financial circles. “We always look at opportunities for value-adding transactions with major international companies. That’s why we looked to Hella”, CEO Jan Morsik explained in retrospect. “However, the opportunities for potential transfer of competencies, particularly in the commercial vehicle sector, have not been sufficiently confirmed for us.”

Knorr-Brems primarily focused on Hela’s business with the censors. They are a prerequisite for autonomous driving, which the Munich-based company also sees as a future opportunity for trucks. Knorr is currently buying technology for this from Continental. Nor-Brems shares tumbled after the acquisition plan became known and fell to an annual low of 88 euros. The entry would have made a mandatory offering to all Hella shareholders. The company is worth over 6.4 billion euros on the stock exchange.