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Cummins To Acquire Meritor For $36.50/share In Cash - Quick Facts

Cummins Inc. (CMI) and axle and brake technology firm Meritor, Inc. (MTOR) announced Tuesday that they have entered into a definitive agreement under which Cummins will acquire Meritor for $36.50 per share in an all cash transaction valued at approximately $3.7 billion, including assumed debt and net of acquired cash.

Meritor is a global leader of drivetrain, mobility, braking, aftermarket and electric powertrain solutions for commercial vehicle and industrial markets.

The transaction will strengthen Cummins' industry-leading range of powertrain components and accelerate development of electrified power solutions.

At closing, Meritor shareholders will receive immediate value at a compelling 48% premium to the Meritor trading price as of February 18, 2022.

The acquisition of Meritor is expected to be immediately accretive to Cummins' adjusted EPS and is expected to generate annual pre-tax run-rate synergies of approximately $130 million by year three after closing.

Cummins intends to finance the transaction using a combination of cash on the company's balance sheet and debt and remains committed to maintaining its strong credit ratings.

The Board of Directors of Meritor has unanimously approved the agreement with Cummins and recommends that Meritor shareholders vote in favor of the transaction at the Special Meeting of Shareholders to be called in connection with the transaction.

The transaction, which is subject to customary closing conditions and receipt of applicable regulatory approvals and Meritor shareholder approval, is expected to close by the end of the calendar year.

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