Auto supplier ZF in talks to acquire TRW

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ZF ZF currently has a prototype suspension strut and knuckle module which uses a mixture of materials including carbon fiber and glass fiber reinforced plastics, aluminum and high strength steel.

German automotive supplier ZF Friedrichshafen AG is in talks to acquire Livonia, Mich.-based TRW Automotive Holdings Corp., Bloomberg reports.

The deal would expand ZF’s reach to safety equipment and sensors boost its status as a global supplier.

TRW confirmed it had received and was evaluating a preliminary acquisition proposal in a statement Thursday, but did not name the potential buyer.

Citing people familiar with the matter, Bloomberg reports ZF values TRW at around $11 billion to $12 billion. TRW is ranked 11th among global OEM suppliers by Plastics News’ sister publication Automotive News, with roughly 36 percent of its 2013 sales in North America and 41 percent in Europe. In North America alone, TRW is ranked eighth and ZF is ranked 15th.

Both companies have plastics operations, but neither is known primarily for it. ZF has been developing composite parts for suspension systems, while TRW has plastics for seat belt and air bag components.

The current talks may not result in a deal, TRW said. The company declined to set a timetable for a decision.

TRW shares were up 9.14 percent Thursday afternoon over the previous day’s close, according to Yahoo Finance.

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