The car parts maker TI Fluid Systems has become the latest London-listed firm to succumb to an overseas takeover, in a deal that will lead to its base in Oxford being hollowed out.
The £1bn takeover by Canada’s ABC Technologies includes cutting as many as 2,700 staff globally, 10% of its workforce, with staff levels in Oxford set to be reduced by a third.
ABC said it intended to “maintain the balance of skills and functions of employees” of TI with the job cuts expected to be primarily targeting employees in corporate, administration, research and development, and functions supporting “plc-related functions”.
The deal will fuel concerns of an exodus of businesses from the London stock market, following a spree of dealmaking that has accelerated in recent days. Aviva revealed on Wednesday it had tried to buy smaller rival Direct Line for £3.3bn, the cafe bar business Loungers succumbed to a £338m bid from the US private equity company Fortress Investment Group, and Australian asset manager Macquarie struck a £700m deal to buy waste management business Renewi.
Shares in Spire Healthcare surged on Friday over speculation that the FTSE 250 company may be the next to sell up, after reports that India’s Narayana Health is in talks to take a controlling stake.
A decision to maintain TI’s main headquarters in the US, at Auburn Hills in Michigan, means the headcount and “associated footprint” of administration functions in Oxford will be cut by a third.
The cuts, which are subject to consultation after the closure of the deal, also include cutting 5% to 10% of TI’s manufacturing facilities and offices globally.
TI, founded in 1922 as Harry Bundy & Co in Detroit, Michigan, started making parts for the Ford Model T. It has 98 manufacturing locations in 28 countries.
TI, which had rejected several offers from Toronto-based ABC over the past few months, said it decided to accept the latest offer of 200p a share because of disruption and uncertainty in the global automotive sector. TI makes car parts including fuel tanks and pipes.
It also said it took the £1.04bn cash deal, which is worth £1.8bn when debt is included, because of the “long-term potential” of the business not being reflected in its stock market valuation of £860m.
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TI said it was a 37.2% premium to its share price before the planned takeover was announced in September.
The diminishing number of UK-listed firms has prompted growing concern about the health of the London market.
