STOCKHOLM – Automotive safety supplier Autoliv will spin off its electronics division next year, creating a standalone unit with annual sales of more than $2.2 billion.
The move comes following a strategic review by the firm’s board of directors. The spinoff will become a new, publicly traded company during the third quarter of 2018.
After the spinoff, Autoliv's current Passive Safety segment will continue to operate under the Autoliv name. The Electronics business will assume a new company name to be announced at a later date.
It is estimated 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.
The key drivers for the separation include the different pace of technology advancement in the two businesses; different skill sets of people throughout the organizations (leadership, engineering, sales); different sales growth rates over the near and long-term with limited customer or operational synergies; 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 standalone companies during 2018. We are excited about the strategic opportunities for both our current business segments as separate companies," said Jan Carlson, chairman, president and CEO of Autoliv.
The Electronics business is expected to receive a cash injection from Autoliv. The intent is for the spinoff to be tax-free to stockholders both in the US and Sweden.