Toronto, Canada -- In the first weeks of the year, major publicly traded companies have announced they have overcome significant hurdles, made major strategic pivots or completed important acquisitions. This week's Tuesday Ticker takes a closer look at how investors are responding to some of these announcements.
PPG Industries
An American automotive coatings provider is turning to a new, organic material as an alternative to carbon fibre.
PPG Industries, a coatings and materials company based in Pittsburgh, United States, said it received a JEC Innovation Award for work on a new vehicle material made partly from flax fibres, the plant used in linen production.
PPG worked with BMW and other partners on the project. Lightweight materials like these can help automakers improve efficiency and may influence future repair methods and material handling in bodyshops. The company announced the goal was to improve sustainability without losing strength.
The move helped draw attention to the automotive coatings giant. After the announcement, PPG shares rose US$1.50 ($2.03) to US$110.07 ($148.60), or by about 1.38%.
Zurich Insurance
A Swiss insurance giant is offering to buy a British rival involved in insuring commercial fleets.
The Zurich Insurance Group, an insurance company based in Zurich, announced an improved offer to buy Beazley plc, a specialty insurance company based in London, United Kingdom.
Zurich offered £12.80 per share in cash ($21.75). Zurich officials said the deal would help it expand in specialty insurance, which covers complex and higher-risk policies. Specialty insurers like Beazley play a growing role in covering complex automotive risks, including commercial fleets and emerging vehicle technologies.
Beazley officials said the company's board is reviewing the proposal, though news of the offer led to a rise in its stock price. Shares rose £3.50 ($5.95) to £11.70 ($19.90), an increase of 42.68%, while Zurich’s shares fell 3.20 Swiss francs ($4.80) to 574.00 Swiss francs ($861.00), down 0.55%.
American Axle & Manufacturing
American Axle & Manufacturing, a Detroit auto parts supplier, announced China’s competition regulator has approved its planned purchase of Dowlais Group, an automotive parts company based in London, United Kingdom.
As the owner of GKN Automotive, Dowlais operates manufacturing and engineering facilities across Europe, North America, China and other parts of Asia. Regulatory approval means government authorities have agreed the deal does not unfairly limit competition.
American Axle officials said the deal would expand its electric vehicle and drivetrain business. The acquisition is expected to bolster the performance of the company as automakers shift from traditional powertrains toward electric and hybrid vehicle platforms. “This approval marks an important milestone toward completing the transaction,” officials wrote in a press release.
Investors were unmoved by the news. In the days following the announcement, American Axle shares fell US$0.10 ($0.14) to US$7.70 ($10.40), down 1.28%.
Forvia Hella
A German automotive electronics provider is teaming up with an American semiconductor manufacturer.
Forvia Hella, an automotive electronics and lighting supplier based in Lippstadt, Germany, announced a development partnership with Analog Devices, a semiconductor company based in Wilmington, United States.
The companies are working on a system called intelligent power distribution, which helps manage how electricity flows through a vehicle. According to various news reports, the system is designed to reduce wiring and support future vehicle software.
The opportunity to increase exposure to the emerging ADAS market did little to turn investors heads. Shares of parent company Forvia fell €0.40 ($0.60) to €13.59 ($20.40), down 2.86%.
