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Farallon Capital Increases Position in TRW Automotive Holdings

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Mar. 24 2015, Updated 11:06 a.m. ET

Farallon Capital and TRW Automotive Holdings

Farallon Capital Management increased its position in TRW Automotive Holdings (TRW) by over $156 million. It represents 2.48% of the total portfolio in 4Q14, up from 0.41% in 3Q14.

TRW makes up 0.12% of the iShares Russell 1000 Value ETF (IWD). The ETF tracks the overall performance of 699 high-value publicly traded companies.

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TRW Automotive Holdings overview

TRW Automotive Holdings supplies vehicular systems, modules, and components to original equipment manufacturers (or OEM) and related aftermarkets around the world. The firm primarily designs, manufactures, and sells active and passive safety-related products that often integrate electronics components and systems. Four segments comprise the business:

  • chassis systems
  • occupant safety systems
  • electronics
  • automotive components

TRW Automotive Holdings noted that more than 83% of its 2013 end-customer sales were made to major OEMs.

TRW shareholders approve acquisition by ZF Friedrichshafen

Livonia, Michigan–based TRW Automotive Holdings said last year that it would be acquired by German auto parts maker ZF Friedrichshafen, also known as ZF Group, for approximately $13.5 billion.

In November 2014, TRW announced that the acquisition has been approved by its shareholders, with 79% voting in favor of the acquisition.

According to the terms of the merger agreement, TRW shareholders will receive $105.60 in cash for each share of TRW. The transaction is expected to be completed by the first half of 2015.

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Sterne Agee bullish on aftermarket auto parts retailers

Sterne Agee analysts were bullish on aftermarket auto parts retailers such as Advance Auto Parts (AAP), AutoZone (AZO), and O’Reilly Automotive (ORLY) last year. Analysts Ali Faghri and Michael Ward noted, “The aftermarket auto parts group offers positive industry demand tailwinds, attractive valuations, e-commerce protection, and a high degree of fragmentation with continued market consolidation opportunities.”

Faghri and Ward added, “With gas prices at multiyear lows, we expect vehicle miles traveled to continue to grow, increasing demand for auto parts while providing relief to the low-income consumer.”

TRW declares 4Q14 results, sales decline 3%

In February 2015, TRW Automotive Holdings announced its 4Q14 results and reported sales of $4.3 billion, a decrease of 3% ($148 million) compared to the same period last year. The firm announced a net loss of $360 million, or $3.22 per share, for 4Q14 in comparison to its net income of $363 million, or $3.00 per share, in 4Q13.

For 2014, TRW reported sales of $17.5 billion and net income of $293 million, or $2.54 per diluted share.

The next article in this series explores Farallon Capital’s position in Covidien Plc.

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