JSE-listed energy storage and automotive component manufacturer Metair has submitted an indicative nonbinding offer to acquire battery manufacturer Tovarna Akumulatorskih Baterij (TAB), in Slovenia.
TAB owns aftermarket automotive battery manufacturing facilities in Slovenia and Macedonia, an aftermarket battery distribution network throughout Europe, as well as a global industrial battery business and an energy storage business.
Metair is in exclusive discussions regarding the potential transaction, for which the indicative purchase consideration is €300-million.
The probable date of completion of the potential transaction is uncertain, and, if successfully concluded, would likely only occur during the final quarter of this year.
If implemented, the transaction is expected to execute on Metair’s stated strategy of expanding its energy vertical with a targeted combined automotive battery production of 15-million units and industrial cell manufacturing of two-million units a year.
The transaction would also result in Metair becoming a key player in the global energy storage solutions market.
Metair has identified TAB as a strategic asset as it has a strong global presence in the industrial batteries segment and provides a platform to secure Metair’s own European aftermarket distribution network.
If the transaction is concluded, it is expected to leverage the scale of the combined group and TAB’s research and development expertise to allocate increased resources to research and development that is directed towards new technologies, such as lithium-ion batteries.
Additionally, the transaction will balance Metair’s original-equipment manufacturing and aftermarket exposure in automotive batteries and also provide a balance between the automotive and industrial segments.
The transaction will enhance Metair’s international brand portfolio, with the TAB-owned distribution footprint, into new regions and deliver on Metair’s desire, through marketing excellence, to become a consumer-focused business with the strength and reach of the TAB brands.
Moreover, the transaction will enhance the production capabilities and technological development of the combined Metair group.
The preliminary view is that Metair would seek to preserve and consider expanding TAB’s existing production sites, to benefit from the competitive manufacturing cost base in TAB’s current locations.
Meanwhile, Metair has entered into a separate agreement with a black female-owned empowerment partner in relation to a potential 30% direct shareholding in Metair’s automotive components vertical.
In addition to increasing black ownership within Metair’s automotive components vertical, the successful completion of the potential black economic empowerment (BEE) transaction is expected to provide Metair with additional funds that can be applied towards the TAB acquisition.