A European battery stronghold

: potential acquisition of Akasol AG by Varta AG

Abstract

European battery manufacturers and automotive companies have started to invest into lithiumion battery production with a strong delay to Asian competitors. Nonetheless, we expect global production capacity to shift towards Europe during the next decade, driven by high current investment rates as well as the benefit of proximity to Europe’s leading automotive manufacturers. While lithium-ion battery productions will be mostly driven by an increased demand for electronic vehicles, consumer electronics will also play an important role for lithium-ion battery market growth. This thesis models a potential acquisition of Akasol AG, a manufacturer of lithium-ion batteries for electronic vehicles, by Varta AG, a manufacturer of small-sizedlithium-ion batteries for consumer electronics. The objective of this paper is to find out whether such an acquisition can provide viable synergies to the merged company and provide are commendation on whether to proceed with this acquisition or not. Our analysis suggests that the merged company would be able to realize synergies amounting to a net present value of €392.9 million, driven by joint procurement efforts and joint research and development capexspending. We suggest a maximum share price premium of 30%, leading to a total purchase price of €1106.3m. This transaction shall be completed towards the third quarter of 2022 and shall be financed through the issuance of debt and equity.

Date of Award	21 Oct 2022
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	António Borges de Assunção (Supervisor)