© Veoneer Electronics Production | April 24, 2020
Veoneer to focus on core Electronics business
Automotive technology company, Veoneer, has, following a strategic review, decided to exit the brake control business and has signed a non-binding agreement with a well-established automotive supplier to divest its yet to be launched US brake control programs.
Following the strategic review initially launched in April 2019, the company has decided to focus on its core Electronics business and exit the brake control business. The company intends to, following the divestiture, to further focus and strengthen its core product offering and continue to build on its position. Through this divestiture, Veoneer expects to achieve total reductions of negative cash flow of more than USD 80 million for 2020 and 2021 as these programs are in an investment and ramp-up phase ahead of major launches. The divestiture to the unnamed automotive supplier follows the completion of the sale of the Asian portion of Veoneer’s brake control business (VNBS) on February 3, 2020. The new company will take over the entire team which will be able to continue to work on these programs. The agreed purchase price is USD 1. In conjunction with the transfer, Veoneer will incur a non-cash write-down of net assets related to VBS, with a negative net income effect of approximately USD 144 million in the first quarter of 2020. The total net income effect from the divestiture of the brake control segment, including both VNBS Asia and the US operations, is expected to be negative by approximately USD 65 million as the VNBS Asia transaction resulted in a gain of USD 77 million. Veoneer will retain a minor legacy brake control business in the US with total expected lifetime sales of around USD 70 million. The final agreement is expected to close during the second quarter of 2020.