Auto parts supplier BorgWarner says it will buy Remy International for $950.8 million, or $29.50 per share, to boost its ability to make parts for electric cars.
BorgWarner makes powertrain components, and Remy is a maker and remanufacturer of alternators, starter motors and electric traction motors. The companies valued the sale at $1.2 billion and say they expect it to close during the fourth quarter.
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Remy said the sale will help it market its products to a broader range of companies.
BorgWarner is offering a 44-percent premium to the latest closing price of Remy International Inc. shares. The stock surged jumped $8.63, or 42 percent, to $29.16 in midday trading, reaching its highest prices in seven and a half years.
Auburn Hills, Michigan-based BorgWarner reported $8.31 billion in sales in 2014 and said it aims to get to $15 billion in revenue by 2020. Remy International had $1.18 billion in sales last year and the Pendleton, Indiana-based company has about 6,600 employees, compared to 22,000 for BorgWarner.
Shares of BorgWarner Inc. gained 54 cents to $54.17 in midday trading.