The ailing auto supplier ZF is selling its driver assistance systems business to die Samsung-Subsidiary Harman International. The Advanced Driver Assistance Systems (ADAS) division is valued at 1.5 billion euros in the deal, ZF announced on Tuesday.
CEO Mathias Miedreich spoke of an important milestone in the group’s strategic realignment. The transaction enables the supplier to concentrate its resources on core technologies such as chassis, drive, commercial vehicle and industrial applications in which it is a global leader.
Harman boss Christian Sobottka said the agreement was a strategic expansion of the portfolio to include ADAS functions. For Samsung, the takeover represents a further step in diversifying its product range, which is dominated by smartphones and memory chips. The US group Harman was taken over by the South Korean technology group Samsung in 2017.
The Samsung subsidiary takes over the business with computers, cameras, radar technology and driver assistance software. The electronics areas for chassis technology and passive safety technology will remain with the German group.
Concentration for ZF, diversification for Samsung
ZF is heavily indebted after major takeovers in the past. The money from the sale of the ADAS division with around 3,750 employees worldwide should be used to reduce debt, said Miedreich. At the end of September, debt was around 10.6 billion euros. In the fall, ZF talked about looking for a partner for ADAS, as the business is fundamentally promising.
The company is currently undergoing restructuring. In addition to transmissions, ZF also offers drives, steering systems, brakes, safety technology and chassis components, among other things. Due to the dampened vehicle production, the group is suffering from a lack of orders from manufacturers and the slow transition to e-mobility.
Non-profitable projects would be reorganized, said CFO Michael Frick. The adjusted EBIT margin and adjusted free cash flow in the current financial year are likely to be in the upper half of the current forecast. ZF predicts a margin of between 3 and 4 percent and a cash inflow of more than 500 million euros for 2025.
The company recently made losses worth millions. Up to 14,000 jobs are to be cut in Germany by the end of 2028. Thousands of jobs have already been lost. The working hours of many employees were also reduced.