STOCKHOLM/FRANKFURT -- Swedish braking systems maker Haldex has backed a 5.53 billion crown ($647 million) takeover offer from German car parts firm ZF Friedrichshafen, even though it is less than a rival bid from Germany's Knorr-Bremse.
Haldex said today its board had unanimously recommended shareholders accept ZF's offer because there was greater certainty it would go through. ZF has received clearances from antitrust regulators, while Knorr-Bremse's bid ran the risk of not clearing all regulatory hurdles, Haldex said.
Knorr-Bremse, which makes braking systems for rail and commercial vehicles, last week raised its offer to 125 crowns ($5.17) per share, while ZF's upped its bid to 120 crowns, corresponding to 5.53 billion crowns and 5.29 billion crowns, respectively.
Several German car parts makers have been looking to buy Haldex, keen on its expertise in brakes for trailers in particular as they seek to develop integrated autonomous driving systems for commercial vehicles.
"ZF has announced that it has received all necessary regulatory approvals and clearances, whereas there is a very real and material risk that Knorr-Bremse's offer would fail to complete," Haldex's board said in a statement.
ZF, which acquired U.S.-based TRW in 2015 for $12.4 billion, makes transmissions and a range of other automotive components.
Haldex's board had previously warned that overlaps with Knorr-Bremse's business would trigger lengthy antitrust reviews.
Knorr-Bremse CEO Klaus Deller said on Friday he expected to get the green light from regulators in a "reasonable time" but would not be drawn on which assets might have to be sold or when a deal could close..
A spokesman for ZF said today the recommendation showed its offer was "better overall and quicker to realize." Shareholders have until Oct. 3 to tender their shares to the German group.
Knorr-Bremse said it had taken note of Haldex's announcement and stood by its offer but was planning to comment in more detail once it had reviewed the statement in depth.
It reiterated its full offer was slated to be published on Sept. 26 and the acceptance period for Haldex shareholders would run until about Dec. 5.