The combined company, which will be called "Diebold Nixdorf," would be a $5.2 billion banking and retail technology giant and Northeast Ohio's eighth Fortune 500 company.
GREEN, Ohio -- Diebold Inc., the technology company best known for its ATMs and bank security systems, has announced plans to merge with Wincor Nixdorf of Paderborn, Germany, in a deal that would create a $5.2 billion banking and retail technology giant and Northeast Ohio's eighth Fortune 500 company.
Wincor Nixdorf provides information technology solutions and services to retail banks and the retail industry around the world, focusing the branch operations of both sectors, according to its website. "We also apply the expertise we have gained from our core business to related industries such as postal services and service station networks," the company said.
It employs 9,000 people in 42 countries, more than half of whom are based outside Germany.
Diebold's concept ATMs, such as this one introduced in 2013, allow users to withdraw money or send cash via their smart phones. Under the terms of their business combination agreement, Diebold will launch a voluntary public tender offer to all of Wincor Nixdorf's shareholders 38.98 Euros in cash plus 0.434 Diebold common shares for every share of Wincor Nixdorf.
The transaction values Wincor Nixdorf, including its net debt, at about $1.8 billion, or 1.7 billion Euros. The implied value of 52.50 Euros per Wincor Nixdorf share represents a 35-percent premium over Wincor Nixdorf's closing share price on Oct. 16, 2015, and s 42-percent premium over the volume-weighted average price of per share over the last three months.
The combined company, which will be called "Diebold Nixdorf," had revenues of about $5.2 billion, or 4.8 billion Euros, in the 12 months prior to Sept. 30, 2015. That total excludes revenue from Diebold's North American electronic security business, which Diebold is selling off to Securitas AB, an $8 billion global security services company based in Stockholm, for $350 million.
After the deal is completed and the necessary approvals are received, Diebold Nixdorf's common shares will be listed on the New York Stock Exchange and the Frankfurt Stock Exchange, with headquarters in North Canton and Paderborn, Germany.
"The combined company will build upon the two companies' shared vision that services and software drive the consumer experience and enable customers to differentiate themselves in an evolving industry," they said in a written announcement. "The combined company will pursue a growing total addressable market of approximately $60 billion, according to independent market estimates and Diebold internal analysis."
Diebold President and CEO Andy Mattes will become CEO of the combined Diebold Nixdorf. "The rate of change we see in our industry is unprecedented, and by leveraging innovative solutions and talent from both organizations we will have the scale, strength and flexibility to help our customers through their own business transformation," said Diebold President and Chief Executive Andy W. Mattes, in a statement. "Our new company will be well positioned for growth in high-value services and software -- particularly in the areas of managed services, branch automation, mobile and omnichannel solutions -- across a broader customer base."
Mattes said Diebold has history of collaborating with Wincor Nixdorf, and that the integration will be successful and minimize disruption. "I am very excited about the many opportunities we will create together," he said.
"The combination of Diebold and Wincor Nixdorf is an exciting opportunity for both companies to shape the future of banking and retail solutions," said Eckard Heidloff, chief executive of Wincor Nixdorf, in that same statement. "Together, we can even better leverage the potential of a rapidly changing banking and retail market due to our strong combined R&D expertise.
"With our complimentary geographic presence, we will be even closer to customers worldwide," he said, referring to Diebold's dominance in North and South America and Wincor Nixdorf's dominance in Europe.
Eckard Heidloff, CEO of Wincor Nixdorf, will be president of Diebold Nixdorf. "Our common view of omnichannel software solutions will enable us to create a best-in-class customer experience to support banks and retailers to cope with challenges of digitalization," Heidloff added. "Furthermore, we are convinced that our employees will benefit from being part of an even stronger, more global organization that is well positioned for the age of digitalization."
Mattes, 54, will be CEO of the combined company, and Heidloff, 59, will be president. Diebold Chief Financial Officer Christopher C. Chapman, 41, will be CFO of the combined company, and Wincor Nixdorf CFO will become chief integration officer and will represent the retail business on the executive committee. The eight-member executive committee will have an additional two members from each company.
The two parties have agreed "there will be no material workforce reductions in Germany beyond this existing program as a result of the transaction," that all labor laws and regulations will be respected, and that "co-determination on the German supervisory board level shall remain unchanged."
A Diebold spokesman said it's too soon to say what the merger will mean to Diebold's headquarters or employees in Green and North Canton, Ohio. "Since we only today announced that we came to terms on a deal, it's premature to comment on what impact a combined Diebold/Wincor Nixdorf will have on jobs in any particular region or operation within the new company, as there are many steps ahead for the agreement to become a reality," such as regulatory and shareholder approval of the transaction, a spokesman said via email.
"However, we anticipate there will be a lot of opportunity created by the combined company in the long term, and we are committed to maintaining and developing an excellent employee base."
The news comes less than a month after Diebold announced its plans to sell off its North America-based electronic security business for $350 million.
"Given the transformation that is occurring in the self-service industry, this strategic decision will enable us to accelerate our own transformation and focus on the exciting opportunities we're seeing for growth and innovation in that market," Mattes said in a statement at the time.
Diebold's shares closed at $35, down $2.51 or nearly 7 percent from Friday's close of $37.51 on the New York Stock Exchange.