) announced that it will be buying all the shares of Gustav
Wahler GmbH u. Co. KG and its general partner. The acquisition is
expected to culminate in the first quarter of 2014 depending on
the standard regulatory approvals.
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The acquisition will reinforce the position of BorgWarner as a
producer of complete exhaust gas recirculation (EGR) systems and
provide better market opportunities in passenger and commercial
Wahler is a manufacturer of EGR valves, EGR tubes and
thermostats. With a total employee base of about 1,250, it counts
General Motors Company
) and John Deere among its customers. Wahler's units are located
across Germany, Brazil, U.S., China and Slovakia. It is expected
that Wahler will generate annual revenues of $350 million in
The demand for EGR valves is high in the market, as it reduces
NOx emissions and boosts fuel efficiency in diesel and
gasoline-direct injection (GDI) engines. The merger of Wahler
with the BorgWarner business will enable BorgWarner to expand and
strengthen its operation.
Moreover, the thermostat technology of Wahler, which ensures
higher fuel efficiency and lower emissions by optimizing engine
temperatures, will support BorgWarner's thermal management
BorgWarner posted a 17.7% increase in adjusted earnings to $1.40
per share in the third quarter of 2013 compared with $1.19 a year
ago. Earnings per share outpaced the Zacks Consensus Estimate by
Revenues increased 6.6% year on year to $1.81 billion, but missed
the Zacks Consensus Estimate of $1.84 billion. Revenues benefited
from the favorable impact of the Euro, but were partially offset
by negative impact of the Japanese Yen. Rising demand for
fuel-efficient vehicles and improved emission standards also
benefited the results of the company.
BorgWarner currently carries a Zacks Rank #3 (Hold).