Diebold Takeover of ATM Rival Wincor Barely Clears Hurdleby
Holder acceptance of 68.9 percent tops 67.6 percent minimum
Deal would create world's biggest cash machine manufacturer
Diebold Inc. narrowly survived a shareholder vote on its planned takeover of German rival Wincor Nixdorf AG, a deal that creates the world’s largest maker of cash machines and systems with more than $5 billion in sales.
Wincor investors controlling 68.9 percent of the company’s stock agreed to the offer by the March 22 deadline of midnight in Germany, surpassing the minimum threshold of about 67.6 percent, North Canton, Ohio-based Diebold said in a statement on Thursday. The company expects the deal to be completed this summer.
Buying Paderborn-based Wincor gives Diebold a bigger presence in Europe, where it now generates less than one fifth of sales, and a stronger position in Asia and Latin America, said Kartik Metha, an analyst with Northcoast Research. The new company, to be called Diebold Nixdorf, will have a global market share of 35 percent to 38 percent, he said, ahead of NCR Corp. with an estimated 27 percent to 30 percent.
“Diebold and Wincor have very little overlap and strengths in different parts of the world,” Metha said by phone from Cleveland, Ohio. “This deal is positive for the industry and the combined company.”
Investor uncertainty about the deal’s prospects ahead of the proxy deadline kept Wincor shares well below the transaction price of about 49.50 euros -- 38.98 euros in cash and 0.434 Diebold shares per Wincor share held. On Nov. 23, when the offer was announced, the transaction valued Wincor Nixdorf at about $1.8 billion including net debt.
Wincor stock advanced as much as 25 percent in Frankfurt after the vote was announced, and was up 21 percent to 53.27 euros as of 3:27 p.m. local time. Diebold surged 7.2 percent to $28.97 in New York.
The deal marks Diebold’s largest acquisition, topping the purchase of Brazilian ATM maker Procomp for $225 million in 1999, according to data compiled by Bloomberg. Founded in 1859, Diebold has about 16,000 employees.
Wincor builds hardware and software, including ATMs and cash registers, for banks and retailers. The company used to be owned by engineering giant Siemens AG before it was sold to private-equity investors in 1999. It held an initial public offering in 2004 and currently operates in 130 countries with about 9,000 employees.
The company generated 68 percent of its 2.47 billion euros ($2.76 billion) in sales in Europe last year.