Cummins Inc. announced it has completed a $3.7 billion deal to acquire an automotive parts supplier that used to be a major employer in Columbus.
Cummins said Wednesday it finalized an agreement to acquire Michigan-based Meritor Inc. for $36.50 in cash per share, a 48% premium on Meritor’s closing price on Feb. 18. The deal is being bankrolled through a combination of cash and debt.
Cummins officials have said that they believe the acquisition will accelerate Cummins’ efforts in technologies that curb emissions from commercial vehicles and industrial applications, including Meritor’s ePowertrains.
Meritor shareholders overwhelmingly voted in favor of Cummins’ acquisition bid in May, according to filings with the U.S. Securities and Exchange Commission.
“We are excited to welcome Meritor’s employees into Cummins,” said Cummins President and CEO Jennifer Rumsey. “Together, Cummins and Meritor will move further and faster in developing economically viable decarbonized powertrain solutions that are better for people and our planet.”
Meritor is no stranger to Columbus, operating under the name ArvinMeritor Inc. from 2000 to 2011. ArvinMeritor formed on July 7, 2000 after the merger of Meritor Automotive Inc. and Columbus-based Arvin Industries Inc., a former Fortune 500 company that at one point employed an estimated 3,000 people here and 850 in Franklin.
ArvinMeritor changed its name to Meritor Inc. in 2011 after shedding many of its former Arvin properties in southern Indiana and elsewhere.
Meritor reported $3.8 billion in sales in fiscal year 2021, which ended on Oct. 3, according to filings with the U.S. Securities and Exchange Commission. By comparison, Cummins reported $24 billion in sales during calendar year 2021.
“Cummins can help grow Meritor’s core business given our sales and service network and customer relationships around the world, and this acquisition has clear synergies for both companies that will position us for future investments during our industry’s technology transition,” said Cummins Executive Chairman Tom Linebarger in a statement. “We are relentless in our focus on Destination Zero, our company strategy to achieve net-zero emissions, and will lead in the transition to decarbonized power. This acquisition is an important step in executing on our strategy.”