ZF Friedrichshafen may go on acquisition spree after TRW deal

Article by Andrew Christian, on September 20, 2014

ZF Friedrichshafen would consider another acquisition – particularly for its industrial and trucking businesses -- after agreeing to acquire TRW Automotive Holdings for $13.5 billion. This was disclosed by ZF chief executive Stefan Sommer, who said that another acquisition the size of TRW is unlikely.

He and TRW CEO John Plant have remarked that carmakers moving to global platforms and are looking for suppliers having the technology and the ability to provide it wherever needed. Suppliers are feeling the pressure to develop advanced components from carmakers who are actively seeking for safety features and driverless vehicles that respond wireless road data.

Plant remarked there is a “big burden” on supplier to engineer technology needed for autonomous and connected cars. He noted that a middle-sized company cannot afford to achieve such feat, but only a select few could in the future.

ZF’s acquisition of TRW will result to the creation of a company large enough to counter pricing demands from the largest carmakers and big enough to become the No. 2 best-selling supplier in the world next to Robert Bosch, according to the Automotive News data center.

Sommer noted that ZF was weak in areas where TRW was strong like in active safety systems. The combined company will have enough scale, products and technology to cater to growing demand for safety components and fuel-efficient and lower-emission vehicles.

With the deal, ZF will have access to TRW’s active safety systems technology -- from air bags to collision sensors. Carmakers are quickly installing such systems in their vehicles as more and more consumers consider such technology as a factor in buying their units.

Likewise, more and more countries are creating regulations that require such features in new vehicles.

Topics: zf, trw

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