In a major merger of auto parts suppliers that are expanding into autonomous-driving technologies, Germany’s ZF Friedrichshafen has agreed to buy U.S. rival Wabco for $7 billion.

The deal will combine ZF’s expertise in driveline and chassis systems with Wabco’s commercial vehicle safety solutions, which include sensors that can automatically slow or stop a vehicle and keep it from drifting from its lane.

ZF had previously acquired TRW Automotive for $13.3 billion in 2015 as part of its shift into autonomous driving. It will pay $136.50 per share for Wabco, a 13% premium to the undisturbed closing price on Feb. 26.

“The combination of both businesses is expected to further accelerate the development of new technologies to enable autonomous commercial vehicle functions, making ZF less dependent on the economic cycle of the passenger car industry,” ZF said in a news release.

The market for advanced driver assistance systems and autonomous vehicles is expected to grow to $96 billion in 2025 and $290 billion in 2035, from about $3 billion in 2015, according to Goldman Sachs.

As The Financial Times reports, suppliers across the auto industry have been bulking up in the race toward autonomous vehicles, with, among other deals, Continental and Knorr-Bremse agreeing last year to partner on automated commercial driving systems for trucks.

ZF has “earmarked 12 billion euros to research and develop the next generation of parts for self-driving vehicles over five years, as rivals push deeper into the space,” the FT noted.

Wabco, formerly Westinghouse Air Brake Co., generated net income of $394 million on revenue of $3.8 billion in 2018. CEO Jacques Esculier said auto parts suppliers industry are facing “a new level of strategic complexity and will attract new competition including new entrants from outside the sector, able to bring unprecedented resources to the table.”

“Considering these factors, we strongly believe this is the appropriate moment to be joining forces with ZF, providing access to critical technology and the global size and scale to de-risk the return on investment required as the industry transforms,” he said in a news release.

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