Autoliv to spin off Electronics business
Through the separation, the company will be able better address two distinct, growing markets with specific product offerings, the company said. The key drivers for the separation include different different pace of technology advancement in the two businesses, different skill sets of people throughout the organizations (leadership, engineering, sales), and different Sales growth rates over the near and long-term with limited customer or operational synergies and different market needs driving investments for growth and innovation (RD&E).
“With the strategic review concluded we now continue the process with full focus on a successful introduction of our two business segments as stand-alone companies during 2018,” said Jan Carlson, Chairman, President and CEO of Autoliv.
After the spin-off, Autoliv’s current Passive Safety segment would continue to operate under the Autoliv name, with continued listings on the New York Stock Exchange and Nasdaq Stockholm. The Electronics business will assume a new company name to be announced at a later stage. It is also expected to be listed in the United States and Sweden. Both companies are to be headquartered in Stockholm, Sweden.
The spin-off is expected to be completed during the third quarter of 2018 subject to market, regulatory and certain other conditions, including approval by Autoliv’s board of directors.
Autoliv’s electronics activities include Active Safety Products (automotive radars, cameras with driver assist systems, night vision systems and positioning systems), Restraint Control and Sensing and Brake Systems. Its market (particularly in active safety towards autonomous driving) is characterized by a high pace of change and growth which requires an agile innovation and partnering model as well as significant upfront investments to capture future growth. It is estimated that the total available market for Safety Electronics will grow from around $20 billion in 2017 to more than $40 billion in 2025. The objective for Electronics is to capture a significant portion of that growth while continuously improving the profitability of the unit.
Electronics is one of the leaders in Active Safety today with one of the broadest and most advanced product portfolios in the industry. Over the last two years Electronics has further positioned itself to be a major player in automotive electronics, including the competitiveness of the product portfolio, becoming a qualified supplier with a high number of OEM’s for active safety and entering into important partnerships with companies like Volvo Cars (Zenuity), Nvidia and Lidar expert Velodyne for the next generation of highly automated cars. In 2016, Autoliv’s Electronics sales amounted to $2.216 billion, with a target to reach $3 billion in revenue in 2020.
The company’s Passive Safety division consists of airbag systems, steering wheels and seatbelts. Its market is characterized by stable growth and incremental innovation which requires the highest requirements on quality and manufacturing efficiency. It is estimated that the total available market for Passive Safety will grow from around $20 billion in 2017 to around $25 billion in 2025.
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