Robert Bosch is looking for a buyer in Asia to purchase its foundation brakes business unit, which it hopes to divest by the end of 2011, two people who are familiar with the matter disclosed.
Specifically, the two sources stated that Bosch hopes that the business will generate as much as 500 million euros ($700 million). According to one of the sources, the business is rather “low-tech” and so it doesn’t hold much of an appeal for big competitors.
In addition, vehicle manufacturers will not like to see the concentration of suppliers increasing further. The market for brakes is dominated by large companies such as TRW and Continental AG and TRW. For the rest of the vehicle components segments, worldwide players are increasingly focusing on high-tech parts. With this scenario, the production of commodity-level components is left to rivals with a lower cost base.
Bosch has already sold the North American portion of the foundation brakes business to Akebono Brake Industry Co., but earlier this year, the Japanese company called off discussions to purchase the remaining part of the unit. Bosch has to seek a new buyer. According to a banker working for the company, the operations of Bosch foundation brakes unit looks like an asset set to be bought by an Asian buyer.
The companies in Asia, especially in China, are willing to expand their operations into the Western markets and have been successful increasingly. As examples, Wanhua took over the Hungarian auto supplier BorsodChem, while Chongquing Light and Textile acquired German supplier Saargummi.