BorgWarner Inc. (NYSE:BWA) entered into a definitive transaction agreement to acquire Delphi Technologies PLC (NYSE:DLPH) from a group of shareholders for $1.5 billion on January 28, 2020. As reported, Delphi Technologies stockholders would receive a fixed exchange ratio of 0.4534 shares of BorgWarner common stock per Delphi Technologies share (or cash in lieu of any fractional BorgWarner Inc. share), pursuant to a scheme of arrangement. Upon closing of the transaction, current BorgWarner stockholders are expected to own approximately 84% of the combined company, while current Delphi Technologies stockholders are expected to own approximately 16%. Under the terms, BorgWarner will pay down Delphi Technologies' existing term loan of $691 million and will absorb Delphi Technologies' outstanding 2025 senior notes at fair value.

As of May 6, 2020, BorgWarner Inc. and Delphi Technologies PLC have amended certain terms of the definitive transaction agreement they originally entered into. BorgWarner Inc. will acquire Delphi Technologies PLC from a group of shareholders for $1 billion. The amendment represents a resolution to BorgWarner's previously stated assertion that Delphi Technologies materially breached the definitive transaction agreement by drawing down on its full $500 million revolving credit facility, which Delphi Technologies disputed on the basis that BorgWarner unreasonably withheld and conditioned its consent. Under the terms of the amendment, which has been approved by the Boards of Directors of both companies, BorgWarner consents to Delphi Technologies' recent draw down of its revolver. The amended transaction agreement also provides for new closing conditions requiring that, at the time of the transaction closing, the total amount of Delphi Technologies' outstanding revolver borrowings do not exceed $225 million, and net of its cash balances, do not exceed $115 million, and its net debt-to- adjusted EBITDA ratio does not exceed a specified threshold. As part of resolving the dispute, the parties have also agreed to a revised exchange ratio to 0.4307 shares. This represents a 5% reduction in the exchange ratio relative to the exchange ratio contained in the original agreement. Post-closing, BorgWarner and Delphi Technologies shareholders would own approximately 85% and 15%, respectively, of the combined company. All other terms and conditions of the original definitive transaction agreement remain substantially the same.

On April 29, 2020, BorgWarner Inc. entered into a credit agreement with Bank of America, N.A., as administrative agent, and other lenders, providing for a 364-day, $750 million unsecured delayed-draw term loan facility (the “Credit Facility”). This credit facility will be used to support the acquisition of Delphi Technologies PLC. BorgWarner announced that it priced a public offering of $1.1 billion aggregate principal amount of its 2.650% Senior Notes due 2027 and plans to use the proceeds to repay certain amounts outstanding under the $1.25 billion senior secured credit facility of Delphi Technologies. As announced on September 2, 2020, the transaction will also be funded from offering of $800 million outstanding 5.00% Senior Notes due 2025. On September 17, 2020, $763.1 million in aggregate principal amount of outstanding 5.00% Senior Notes due 2025, were validly tendered and not validly withdrawn (exchange offer) and related consent solicitation made by BorgWarner on behalf of Delphi Technologies with respect to the DT Notes.

Post-transaction, Delphi Technologies will become a wholly- owned subsidiary of BorgWarner Inc. The combined company will operate as BorgWarner. The agreement provides that Delphi Technologies will pay a $53.5 million termination fee to BorgWarner if the Delphi Technologies terminates the agreement to enter into a superior proposal. The combined company will be led by Frédéric Lissalde, BorgWarner's President and Chief Executive Officer, and Kevin Nowlan, BorgWarner's Chief Financial Officer. Post the acquisition, the employee of Delphi Technologies will be the part of the combined company. The combined company will be headquartered in Auburn Hills, Michigan. Delphi Technologies made a decision to draw down on its revolver on March 30, 2020. Delphi Technologies received notice from BorgWarner asserting that Delphi materially breached the transaction agreement as a result of drawing on the revolving credit facility without BorgWarner's prior written consent and also asserting that, if such breach is not cured within 30 days, BorgWarner has the right to terminate the transaction agreement.

The transaction is subject to customary closing conditions, including, among other things, the expiration or termination of the applicable waiting period under the Hart- Scott- Rodino Antitrust Improvements Act of 1976, as amended, the receipt of certain other governmental clearances and regulatory approvals, the absence of legal restraint that prohibits the consummation of the transaction, the approval for listing on the NYSE of the new company shares issued in connection with the transaction indebtedness and financial performance of Delphi Technologies and the sanctioning of the scheme of arrangement by the Royal Court of Jersey. The transaction is also subject to the approval of the scheme of arrangement by a majority in number of the Delphi Shareholders present and voting, either in person or by proxy, representing at least 75% of the voting rights of those holders. Delphi Technologies' extraordinary general meeting of shareholders is to be held on June 25, 2020. The Board of Directors of Delphi Technologies recommends the shareholders to vote in favor of the transaction. The agreement has been unanimously approved by the Boards of Directors of both BorgWarner and Delphi Technologies. As of April 1, 2020, Federal Trade Commission has approved the transaction. As of June 25, 2020, the transaction was approved by the shareholders of Delphi. As of August 5, 2020, regulatory approval from six out of seven jurisdictions have been received. As on August 26, 2020, BorgWarner Inc. has filed for approval by the European Commission of the acquisition of Delphi Technologies PLC. The European Commission has set September 30, 2020, as the deadline for deciding on the transaction. The transaction is not conditioned upon the commencement or completion of the exchange offer and consent solicitation. The transaction is expected to close in the second half of 2020. The transaction is expected to be meaningfully accretive to adjusted GAAP earnings per share in the second full year after closing. BorgWarner expects the combined company to maintain a strong balance sheet, with a 2019 pro forma gross debt to adjusted EBITDA ratio of approximately 1.6x at closing.

BofA Securities, Inc. and Rockefeller Financial LLC acted as financial advisors and Mario A. Ponce, Kathryn K. Sudol, Ngozi Nezianya, Jeannine McSweeney, Erin Murphy, Sara Razi, Lori Lesser, Robert Holo, Michael Isby, Jennifer Hobbs, Richard Fenyes and Eric Wolf of Simpson Thacher & Bartlett LLP acted as the legal advisors for BorgWarner. Goldman Sachs International acted as financial advisor and will receive an advisory fee of $30 million. Eric Schiele, David Klein, Joseph Halloum, Sophia Hudson, Dean Shulman, Sehj Vather, Melissa Hutson, Omar Raddawi, Seth Traxler and Shellie Freedman of Kirkland & Ellis LLP acted as legal advisors to Delphi Technologies. John A. Marzulli and Alan S. Goudiss of Shearman & Sterling LLP acted as the legal advisor for BofA Securities, Inc. Innisfree M&A Incorporated acted as proxy solicitation agent for Delphi and will receive an advisory fee of $0.04 million. Goldman Sachs International provided fairness opinion to Board of Delphi Technologies. Stephen M. Kotra of Sullivan & Cromwell LLP acted as the legal advisor for Goldman Sachs.

BorgWarner Inc. (NYSE:BWA) completed the acquisition of Delphi Technologies PLC (NYSE:DLPH) from a group of shareholders on October 1, 2020. Post-closing, Delphi Technologies shares will no longer be listed on the NYSE. On September 29, 2020, the Board of Directors of BorgWarner Inc. acted to increase the size of the Board to eleven members and appointed Nelda J. Connors and David S. Haffner. Robin J. Adams, Joseph S. Cantie, Nelda J. Connors, Gary L. Cowger, Richard F. Dauch, David S. Haffner, Helmut Leube, Timothy M. Manganello, Hari N. Nair and MaryAnn Wright resigned from the Delphi Board and from all committees of the Delphi Board on which they served. Richard F. Dauch, Vivid Sehgal, James D. Harrington and Kevin Quinlan were no longer Executive Officers of Delphi Technologies. On October 1, 2020, the court order of Royal Court of Jersey was issued and delivered to the Registrar of Companies in Jersey. Transaction was completed after the satisfaction of certain conditions relating to indebtedness of Delphi Technologies, and the satisfaction or waiver of customary closing conditions.