RECENT TRANSACTIONS

Tire pressure monitoring business

During the fourth quarter of 2011, the Company incurred $21.5 million in expense associated with the loss on sale of the tire pressure monitoring business, including costs related to the divestiture, and a write-down of a portion of the ignitor and electronic business. The Company received $22.9 million in cash, classified as an investing activity within the Consolidated Statement of Cash Flows, from the sale of its tire pressure monitoring business, including the manufacturing facility in Bretten, Germany, to Huf Electronics GmbH. The sale of the tire pressure monitoring business will allow the Company to focus on its powertrain technologies.

BorgWarner Vikas Emissions Systems India Private Limited

On August 2, 2011, the Company purchased the noncontrolling interest's 40% share of BorgWarner Vikas Emissions Systems India Private Limited for $29.4 million in cash, which has been classified as a financing activity within the Consolidated Statement of Cash Flows. In accordance with ASC Topic 810, the Company reduced its noncontrolling interest balance by $2.8 million and reduced capital in excess of par value by $26.6 million. As a result of this transaction, the Company owns 100% of BorgWarner Vikas Emissions Systems India Private Limited.

Traction Systems division of Haldex Group

On January 31, 2011, the Company acquired 100% of the stock of Haldex Traction Holding AB ("Haldex Traction Systems"). Haldex Traction Systems has operations in Sweden, Hungary and Mexico. The consideration for the acquisition, net of cash acquired, was $214.9 million (1.38 billion Swedish Krona).

The acquisition is expected to accelerate the Company's growth in the global all-wheel drive (AWD) market as it continues to shift toward front-wheel drive (FWD) based vehicles. The acquisition will add industry leading FWD/AWD technologies, with a strong European customer base, to the Company's existing portfolio of front and rear-wheel drive based products. This enables the Company to provide global customers a broader range of AWD solutions to meet their vehicle needs.

The operating results are reported within the Company's Drivetrain reporting segment as of the date of acquisition. The Company paid $203.7 million, which is recorded as an investing activity in the Consolidated Statement of Cash Flows. Additionally, the Company assumed retirement-related liabilities of $5.3 million and assumed debt of $5.9 million, which are reflected as non-cash transactions in the Consolidated Statement of Cash Flows.

The following table summarizes the aggregated estimated fair value of the assets acquired and liabilities assumed on January 31, 2011, the date of acquisition:



(millions of dollars)
Receivables, net	$	31.8
Inventories, net	10.4
Property, plant and equipment, net	26.4
Goodwill	96.2
Other intangible assets, net of tax	86.4
Other assets and liabilities	3.8
Accounts payable and accrued expenses	(40.1		)
Total consideration, net of cash acquired	214.9

Less: Assumed retirement-related liabilities	5.3
Less: Assumed debt	5.9
Cash paid, net of cash acquired	$	203.7

BERU-Eichenauer GmbH

In anticipation of market growth expected for its electric cabin heaters, the Company completed the acquisition of BERU-Eichenauer GmbH by acquiring the shares of its former joint venture partner, Eichenauer Heizelemente GmbH & Co. KG. The former 50/50 joint venture was formed in 2000 to develop and manufacture electric cabin heaters. The acquisition formally took effect on May 1, 2010.

The pre-tax impact of this acquisition was an increase in intangible and other assets of $17.6 million related to adjusting the Company's 50% investment to fair value under ASC Topic 805, a gain of $8.0 million and a decrease in cash of $9.6 million. The Company's $9.6 million payment has been recorded as an investing activity in the Consolidated Statement of Cash Flows.

Dytech ENSA S.L.

On April 10, 2010, the Company acquired 100% of Dytech ENSA S.L. (“Dytech”), headquartered in Vigo, Spain. The gross cost of this acquisition is $147.7 million, or $147.6 million, net of cash and cash equivalents. Dytech is a leading producer of exhaust gas recirculation (EGR) coolers, EGR tubes, and integrated EGR modules including valves for automotive and commercial vehicle applications, both on- and off-road. This acquisition enhances the Company's emissions products offering and system/module expertise, further differentiating BorgWarner as a leader in highly engineered automotive systems. In addition, Dytech's geographic footprint and customer base complements and strengthens the Company's market presence with global automakers. The operating results of Dytech are reported within the Company's Engine reporting segment from the date of acquisition. The Company's $147.6 million payment has been recorded as an investing activity in the Consolidated Statement of Cash Flows.

The following table summarizes the aggregate estimated fair values of the assets acquired and liabilities assumed on April 10, 2010, the date of acquisition.



(millions of dollars)
Receivables, net	$	54.3
Inventories, net	44.7
Property, plant and equipment, net	45.0
Goodwill	74.1
Other intangible assets, net of tax	31.1
Accounts payable and accrued expenses	(81.5		)
Other assets and liabilities, net	(9.3		)
Assumed debt	(10.8		)
Net cash consideration	$	147.6

Etatech, Inc. Technology

On June 2, 2009, the Company announced the purchase of advanced gasoline ignition technology and related intellectual property from Florida-based Etatech, Inc. The high-frequency ignition technology enables high-performing, lean burning engines to significantly improve fuel economy and reduce emissions compared with conventional combustion technologies. The Company made a cash payment of $7.5 million in both June 2009 and May 2010 for the purchase of Etatech, Inc., which has been reflected as an investing activity in the Consolidated Statements of Cash Flows.

BERU

The Company acquired approximately 95.6% of the outstanding shares of BERU Aktiengesellschaft (“BERU”), headquartered in Ludwigsburg, Germany prior to 2009.

On January 7, 2009, the Company informed BERU of its intention to purchase the remaining outstanding shares at that time of approximately 4%, using the required German legal process referred to as a “squeeze-out” to gain 100% ownership. This process included an affirmative vote of BERU shareholders at its May 20, 2009 annual shareholder meeting. The registration of the “squeeze-out” was challenged by certain noncontrolling shareholders of BERU with the commercial register in June 2009. The “squeeze-out” share price passed by the BERU shareholders in May 2009 was €73.39, an increase of €2.07 from the $71.32 share price included in the 2008 Domination and Profit Transfer Agreement ("DPTA"). This increase was reflected as an increase to the Company's total DPTA obligation.

On September 18, 2009, the noncontrolling shareholders of BERU who had challenged the “squeeze-out” resolution dropped their complaint. The elimination of all actions against the resolution allowed BERU to register the “squeeze-out” with the commercial register. The “squeeze-out” became effective on September 30, 2009, making the Company the only shareholder of BERU. On October 2, 2009, BERU was delisted as a public company in Germany. In October 2009, the Company paid €22.9 ($33.5) million for the approximately 311,000 outstanding shares of BERU. Certain noncontrolling shareholders have challenged the “squeeze out” share price of €73.39. The Company is awaiting the judge's ruling regarding the share price from the hearing held on April 1, 2011.

As a result of the tendering of shares, the Company owned 100% of all BERU's outstanding shares at December 31, 2009. The tendering of approximately 4% of BERU shares, at a cost of $46.6 million, has been reflected as a financing activity in the Consolidated Statement of Cash Flows. Additionally, on May 22, 2009, the Company paid the annual perpetual dividend of $1.9 million, which is also reflected as a financing activity in the Consolidated Statement of Cash Flows.