Commercial vehicle supplier Haldex AB reported net income plummeted and revenue improved slightly in the second quarter, amid protracted efforts by rival supplier Knorr-Bremse Group to purchase the company — a move the Haldex board now seeks to prevent.
Knorr-Bremse is the parent company of Elyria, Ohio-based Bendix Commercial Vehicle Systems.
For the period ended June 30, net income plunged 84% to the equivalent of $1.2 million, or 3 cents per share, compared with $7.6 million, or 17 cents, a year earlier, according to the Landskrona, Sweden-based company, which reports in krona.
Year-over-year revenue rose 2.8% to $146 million, compared with $142 million in the 2016 period.
Net income at Haldex for the six-month period fell to $4.8 million, or 11 cents, compared with $13.6 million, or 30 cents, in the 2016 period.
Revenue, year-to-date, rose to $288 million, compared with $277 million a year earlier.
“North America, which represents half of our sales, continues to be a challenge. The market in North America has improved, but Haldex has not been able to fully benefit from this upswing, primarily due to the uncertainty surrounding Haldex’s situation [following the Knorr-Bremse offer],” Åke Bengtsson, Haldex acting CEO, said in a statement.
On Sept. 5, 2016, Munich, Germany-based Knorr-Bremse offered about $540 million for Haldex, and now seeks to extend the offer’s deadline to Feb. 9, 2018, to allow regulators more time to evaluate the proposed offer.
At the time of the offer, Haldex said when and if approval is granted — which depends on completion of anti-trust investigations — the deal could be completed. However, the Haldex Board said June 29 it no longer supported the bid by Knorr-Bremse. The board reiterated that position in a statement Aug. 2, citing its conclusion that Knorr-Bremse’s bid will not be approved following feedback the Haldex board received from regulatory authorities in Europe and the U.S.
Meanwhile, the lengthy process is proving disruptive to its busines, Haldex said.
Amid the uncertainty, for example, the Haldex board said two contracts “relating to two major truck and trailer manufacturers with an annual contract value of $17 million and $8 million respectively, have now been lost without possibility to re-enter the process.” Also, specialists and key employees have left the company, including hard-to-replace engineers who had been involved in research and development.
In an effort to secure approval of the deal, Knorr-Bremse recently requested Haldex convene a meeting of its shareholders, “whose investment is at risk, and [who have] the final and ultimate word in the matter. Knorr-Bremse regards the shareholders’ vote as Haldex’s official position and thus binding for the board of directors” the company said in a statement.
Haldex said it would hold the meeting on Aug. 17.
Haldex manufactures commercial vehicle air disc brakes, brake adjusters and brake pads, plus air suspension control valves and air treatment products, among other items, according to the company.
Knorr-Bremse also is a supplier of braking and control systems for commercial vehicles and said it supplies all the world’s leading commercial vehicle manufacturers. Its products also include driver assistance systems, plus aftermarket services.
The battle over Haldex is part of a broader push by parts makers to combine to share development costs amid an industry shift toward self-driving and electric-vehicle technologies, according to Bloomberg News.