Item 1.01. Entry into Material Definitive Agreement.
On May 19, 2022, Meritor, Inc. (the "Company") entered into an agreement with
Siemens Aktiengesellschaft ("Siemens"), pursuant to which the Company and
certain of its affiliates will acquire the Commercial Vehicles business of
Siemens and its affiliates for approximately €190 million in cash, subject to
certain purchase price adjustments (the "Master Sale and Purchase Agreement").
The Master Sale and Purchase Agreement provides for the acquisition to be
effected by the sale and transfer of assets and equity interests comprising the
Commercial Vehicles business. The Master Sale and Purchase Agreement contains
customary representations, warranties, covenants and post-closing indemnities
for a transaction of this nature and type, as more fully described in the Master
Sale and Purchase Agreement.
The Company expects to close the transaction by the end of calendar year 2022,
subject to receipt of regulatory approvals and satisfaction of other customary
closing conditions.
The foregoing description of the Master Sale and Purchase Agreement is qualified
in its entirety by reference to the full text of the Master Sale and Purchase
Agreement, which is filed as Exhibit 10-a to this Form 8-K and is incorporated
herein by reference.
Forward-Looking Statements
This Form 8-K contains statements relating to future results of the Company
(including certain outlooks, projections and business trends) that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are typically identified by words
or phrases such as "believe," "expect," "anticipate," "estimate," "should," "are
likely to be," "will" and similar expressions. Actual results may differ
materially from those projected as a result of certain risks and uncertainties,
including but not limited to the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger agreement
pursuant to which the Company would become a wholly owned subsidiary of Cummins
Inc. (the "Merger"); the failure to obtain approval for the Merger from the
Company's shareholders, the failure to obtain certain required regulatory
approvals or the failure to satisfy any of the other closing conditions to the
completion of the Merger within the expected timeframes or at all; risks related
to disruption of management's attention from ongoing business operations due to
the Merger; the effect of the announcement of the Merger on the ability to
retain and hire key personnel and maintain relationships with customers,
suppliers and others with whom the Company does business, or on operating
results and business generally; the ability to meet expectations regarding the
timing and completion of the Merger; the duration and severity of the COVID-19
pandemic and its effects on public health, the global economy and financial
markets, as well as our industry, customers, operations, workforce, supply
chains, distribution systems and demand for our products; the ongoing conflict
between Russia and Ukraine; reliance on major OEM customers and possible
negative outcomes from contract negotiations with our major customers, including
failure to negotiate acceptable terms in contract renewal negotiations and our
ability to obtain new customers; the outcome of actual and potential product
liability, warranty and recall claims; our ability to successfully manage
rapidly changing volumes in the commercial truck markets and work with our
customers to manage demand expectations in view of rapid changes in production
levels; global economic and market cycles and conditions; availability and
sharply rising costs of raw materials, including steel, transportation and
labor, and our ability to manage or recover such costs; technological changes in
our industry as a result of the trends toward electrified drivetrains and the
integration of advanced electronics and their impact on the demand for our
products and services; our ability to manage possible adverse effects on
European markets or our European operations, or financing arrangements related
thereto in the event one or more countries exit the European monetary union;
risks inherent in operating abroad (including foreign currency exchange rates,
restrictive government actions regarding trade, implications of foreign
regulations relating to pensions and potential disruption of production and
supply due to terrorist attacks or acts of aggression); risks related to our
joint ventures; the ability to achieve the expected benefits of strategic
initiatives and restructuring actions; our ability to successfully consummate
the acquisition of the Siemens Commercial Vehicles Bus & Truck business; our
ability to successfully integrate the products and technologies of the Siemens
Commercial Vehicles Bus & Truck business and future results of such acquisition,
including its generation of revenue and its being accretive; the demand for
commercial and specialty vehicles for which we supply products; whether our
liquidity will be affected by declining vehicle production in the future; OEM
program delays; demand for and market acceptance of new and existing products;
successful development and launch of new products; labor relations of our
Company, our suppliers and customers, including potential disruptions in supply
of parts to our facilities or demand for our products due to work stoppages; the
financial condition of our suppliers and customers, including potential
bankruptcies; possible adverse effects of any future suspension of normal trade
credit terms by our suppliers; potential impairment of long-lived assets,
including goodwill; potential adjustment of the value of deferred tax assets;
competitive product and pricing pressures; the amount of our debt; our ability
to continue to comply with covenants in our financing agreements; our ability to
access capital markets; credit ratings of our debt; the outcome of existing and
any future legal proceedings, including any proceedings or related liabilities
with respect to environmental, asbestos-related, or other matters; rising costs
of pension benefits; possible changes in accounting rules; and other substantial
costs, risks and uncertainties, including but not limited to those detailed in
our Annual Report on Form 10-K for the year ended September 30, 2021, our
Quarterly Report on Form 10-Q for the quarter ended April 3, 2022 and from time
to time in other filings of the Company with the Securities and Exchange
Commission. These forward-looking statements are made only as of the date
hereof, and the Company undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise, except as otherwise required by law.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description
10-a Master Sale and Purchase Agreement dated as of May 19, 2022 by and between
Meritor, Inc. and Siemens Aktiengesellschaft (portions of this exhibit have
been omitted).
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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