Akka Takes Full Ownership of MBTech

/ September 2, 2018/ Akka, Automotive, Daimler, Germany, M&A (large, with revenues above $50m), Mechanical Engineering

Akka Technologies has finalized the full ownership of MBTech, up from a 65% stake. MBTech is the former engineering captive of Daimler Benz. Along with the acquisition, Akka has signed a contract with Daimler Benz.

Stock markets responded favorably to the announcement: Akka was up by 4% on Friday, to an all-time high, valuing Akka USD 1.6bn. Now that Akka has full ownership of MBTech, now called Akka Automotive, financial analysts are expecting Akka to improve the operations of MBTech. And, to be honest, MBTech in its six years of 65% ownership by Akka, has been far from a smooth ride. One figure says it all: MBTech’s headcount was 3,504 in April 2012. It now is 3,300. During the same period, the revenues of former owner Daimler Benz have grown by 37%. Something must have gone wrong.

So what went wrong? Well, the usual suspects: difficult governance of the JV partners, and all the difficulties that come with acquiring a captive: lack of a sale culture, lack of client diversification, focus on quality rather P&L and pyramid shaping. All good reasons that make captives not such a good idea, after all.


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