Battery manufacturer VARTA AG signed an agreement today to acquire the VARTA Consumer Batteries business (“VARTA Consumer”) from the US American company Energizer Holdings, Inc. (“Energizer”). A number of national companies belong to VARTA Consumer Batteries, which has its main production site in Dischingen, Germany.
The most important facts at a glance:
• The transaction expands VARTA AG’s portfolio to include portable batteries for retail consumers
• VARTA AG gains access to attractive retail distribution channel (“retail”)
• Worldwide VARTA trademark rights will be reunited under the aegis of VARTA AG
• VARTA Consumer Batteries becomes part of an innovative technology company
• VARTA AG and VARTA Consumer Batteries will continue to consistently pursue their growth strategies
• VARTA Consumer Batteries’ high, stable cash flow will principally be invested in the medium term in the expansion of VARTA AG’s fast-growing, highly profitable, lithium-ion production and in the VARTA Consumer Batteries business area
VARTA Consumer Batteries is one of the leading manufacturers of consumer portable batteries in Europe. The company has positioned itself as the market leader in numerous European countries. VARTA Consumer Batteries’ successful business development is based on its well-developed European distribution network with numerous local companies and longstanding customer relationships with nearly all European key retailers. The product portfolio includes batteries, rechargeable batteries, chargers, portable power (Power Banks) and lamps. VARTA Consumer Batteries generated sales valued at approximately 300 million euros in the 2018 financial year.
The acquisition of VARTA Consumer Batteries unites the worldwide VARTA brand rights under the aegis of VARTA AG. This strengthens the presence of the VARTA brand and its products in all segments. By expanding its product range, the company diversifies its revenue streams and puts its business model on a broader base. The takeover guarantees an innovative product range with the highest quality standards under the VARTA brand name.
“With this transaction, we take advantage of a unique opportunity to bring together what belongs together. This acquisition enables us to again make extensive use of our premium brand name, which stands for technology and innovation leadership,” says Herbert Schein, CEO of VARTA AG. “In addition, VARTA Consumer Batteries’ attractive cash-flow profile will significantly contribute to the expansion of our fast-growing, highly profitable, lithium-ion production and can be used to finance further growth in the VARTA Consumer division. The growth strategy and the pace of expansion for lithium-ion batteries will remain unchanged and the VARTA Consumer Batteries area can also be further expanded.”
Steffen Munz, CFO of VARTA AG, adds: “We are creating a globally leading manufacturer of batteries with combined sales of more than 600 million euros and an operating result (EBITDA) of more than 100 million euros. The expected purchase price is well below the sum paid in transactions among comparable companies.”
The expected net selling price for VARTA Consumer Batteries is approximately 100 million euros. This price will not be finally determined until the company acquisition has been completed. The transaction is fully secured by financing commitments from the syndicate banks, so no equity capital measure is needed to finance the transaction. There is accordingly no dilution of shares held by the shareholders of VARTA AG.
With the acquisition of VARTA AG, VARTA Consumer Batteries has gained a strategic investor with a long-term interest in strengthening the VARTA brand on a global level. “We are very pleased that we have succeeded in reuniting two companies which share a common history and a mutual commitment to quality. With the takeover by VARTA AG, VARTA Consumer Batteries will receive a further boost to continue its extremely successful growth trajectory of recent years,” says Peter Werner, Managing Director, VARTA Consumer Batteries EMEA.
The closing of the transaction is still subject to the approval of the European Commission and the fulfillment of customary conditions precedent, including antitrust clearance. The closing is currently expected to take place in the second half of 2019.
The Background of the Transaction
The original VARTA AG was divided into three business areas and sold to different companies in 2002. Spectrum Brands, the new owner of VARTA Consumer Batteries, sold the company to Energizer in early 2019. However, as a condition for the acquisition, the European Commission required that the VARTA Consumer Batteries business in the Europe and Middle East Africa regions, including the VARTA production and distribution facilities in Dischingen and Ellwangen, be resold to a third party within six months. This condition is now fulfilled with the purchase by VARTA AG. Energizer will continue to use the trademark rights for the American and Asian markets through license agreements.
For further information about VARTA Consumer products and the company visit: www.varta-consumer.com
+49 79 61 921 – 221
Head of Investor Relations
+49 79 61 921 – 969
haebmau for VARTA Consumer Batteries
+49 89 381 08 – 173
+49 89 381 08 – 119
About VARTA AG
VARTA AG, as the parent company of the Group, is active in the Microbatteries and Power&Energy business segments through its subsidiaries VARTA Microbattery GmbH and VARTA Storage GmbH. Today, VARTA Microbattery GmbH is already an innovation leader in the field of microbatteries, one of the market leaders for hearing aid batteries and is also striving for market leadership for lithium-ion batteries in the wearables sector, especially for hearables. VARTA Storage GmbH focuses on intelligent energy solutions for tailor-made battery storage systems for OEM customers as well as on the design, system integration and assembly of stationary lithium-ion energy storage systems. With five production and manufacturing facilities in Europe and Asia as well as sales centers in Asia, Europe and the USA, the operating subsidiaries of the VARTA AG Group are currently active in over 75 countries worldwide.
About VARTA Consumer Batteries GmbH & Co. KGaA
VARTA Consumer Batteries GmbH & Co. KGaA is a supplier of innovative high-quality products, including batteries, rechargeable batteries, chargers and lights, with which it generates annual sales totaling over 300 million euros in Europe. The business is run from the company’s headquarters in Ellwangen. VARTA Consumer Batteries is both the market leader and the only German battery manufacturer of primary batteries for the end consumer, that relies on Germany as its manufacturing location. Its factory in Dischingen annually produces circa 1.5 billion alkaline batteries. VARTA Consumer Batteries brings movement into the mobile energy market with strong product ideas developed on the basis of expertise acquired during more than 130 years of the company’s history. Along with its innovative strength, VARTA Consumer Batteries is also unique thanks to the breadth, quality and design of its product assortment. The secrets of its successful product portfolio are an intensive focus on consumers’ lifestyle and close cooperation with the trade. This enables VARTA Consumer Batteries to respond successfully, speedily and flexibly to current trends in devices on the dynamic Fast Moving Consumer Goods (FMCG) market, to provide optimal energy solutions and to keep the promise of its brand message: “VARTA – in service for you”.