STOCKHOLM, April 23 (Reuters) – Swedish auto technology group Veoneer said late Thursday it would exit its brake control business following a strategic review, and had inked a non-binding deal to sell its U.S. brake control programs to an unnamed automotive supplier.
Loss-making Veoneer, which makes radars, vision systems and software for advanced driver-assistance systems, said the yet-to-be-launched U.S. programs would be sold for $1, with the company expecting to reduce its negative cash flow by more than $80 million for 2020 and 2021 as a consequence.
As part of the deal, the Sweden-based company said it will make an asset write-down in the brake control business with a negative effect on net income of about $144 million in the first quarter of 2020, but with no effect on cash flow or financial targets.
The deal comes in after Veoneer, which competes with the likes of Aptiv and Bosch, sold its brake control operations in Asia earlier this spring.
The final agreement is expected to be sealed during the second quarter.
The Swedish company is scheduled to report its first-quarter numbers later in the day. (Reporting by Johannes Hellstrom, Editing by Sherry Jacob-Phillips)