As of: February 21, 2024, 4:16 p.m
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The auto supplier ZF is in billions of dollars in debt.
© Felix Kästle / dpa
ZF is facing major challenges due to the change to e-mobility.
The transformation is made more difficult by the supplier's high debts.
The sale of an entire division is now becoming more concrete.
Stuttgart/Friedrichshafen - The time frame for the sale of the safety technology division of the automotive supplier ZF Friedrichshafen is becoming more concrete.
“By the middle of the year we would be ready for an investor or an IPO,” said ZF boss Holger Klein at a press conference in Stuttgart.
The supplier had already announced in October 2022 that it wanted to separate the “Passive Safety Technology” division, which mainly produces seat belts and airbags, from the group structures and sell it.
ZF has billions in debt
The main reason for the planned sale is the group's high debts.
As of the first half of 2023, ZF was in the black for a good eleven billion euros.
This is mainly due to the acquisitions of the automotive supplier TRW and the brake specialist Wabco.
At the same time, the supplier from Lake Constance will have to invest billions in the coming years in order to be able to master the transformation to e-mobility.
Klein emphasized that the decision is a strategic one.
The division's business is good and profitable.
“But the question was: Which transactions can be used to meaningfully reduce debt?
Then of course we come up with deals that have value,” said Klein.
In addition, the company would have to invest more money to further develop the area.
However, there are virtually no synergies with the other ZF business areas.
“The airbag business, for example, is by definition a passenger car issue.
You won’t find this in a forklift, not in a tractor, not in a commercial vehicle.”
ZF boss remains relaxed
However, Klein left a specific date for the sale open - and was relaxed: "We don't want to get rid of it at any cost," he said.
If ZF is operationally so good that it can handle its debts and reduce them, then there is no pressure.
But it is the preferred solution - both from a strategic point of view and because of debt relief.
We are therefore in discussions and monitoring the capital market.
In 2022, the security division accounted for around a tenth of ZF's total sales of around 43.8 billion euros.
Around 20 percent of the supplier's almost 165,000 employees were employed in this area in 2022.
In Germany there are four locations in Alfdorf, Aschaffenburg, Aschau and Laage.
Employee representatives recently warned of major job cuts at the supplier.
(dpa, lf)