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© Autoliv Electronics Production | September 14, 2017

Autoliv is looking into a company split

Automotive safety systems supplier Autoliv has initiated a strategic review of its operating structure with the intent to create separate companies of its current business segments, Passive Safety and Electronics.
The intent is to create two publicly traded companies capable of addressing two distinct, growing markets with leading product offerings and thereby create additional value for shareholders, customers and other stakeholders as compared to the current, combined structure of Autoliv. The strategic review process will evaluate this and other options. Although the strategic review has been initiated there is no guarantee that the review will result in any transaction, including a separation or listing of the businesses, the company states in a press release.

“The current operational model has served Autoliv very well, creating tremendous value for its shareholders and other stakeholders since the initial listing on the Stockholm stock exchange in 1994. Over the last decade our Electronics business has grown and matured next to our world leading Passive Safety business and today we have two distinct, successful businesses, each with its own unique business drivers. We believe it’s time to let them both individually maximize their potential,” said Jan Carlson, Chairman, President and CEO of Autoliv.

Electronics consists of Active Safety Products (automotive radars, cameras with driver assist systems, night vision systems and positioning systems), Restraint Control and Sensing and Brake Systems. Its market – particularly in active safety towards autonomous driving – is characterised by a high pace of change and growth which requires an agile innovation and partnering model as well as significant upfront investments to capture future growth. It is estimated that the total available market for Safety Electronics will grow from around USD 20 billion in 2017 to more than USD 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.

Passive Safety consists of airbag systems, steering wheels and seatbelts. This market is more characterised by stable growth and incremental innovation which requires the highest requirements on quality and manufacturing efficiency. It is estimated that the total available market for Passive Safety will grow from around USD 20 billion in 2017 to around USD 25 billion in 2025. During the same period Passive Safety is expected to outgrow the market and light vehicle production, which is expected to grow by close to two percent annually.

If the separation takes place, the process is estimated to take around one year under most separation scenarios.

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November 14 2017 8:30 PM V8.8.9-2