Automotive safety supplier Autoliv Inc. is considering a split into two companies: one focused on electronics and the other on passive safety equipment.
The company said management is conducting a strategic review of its operating structure with the intent of creating two publicly traded businesses, but there is no guarantee the review will result in any transaction, such as a separation or listing of the businesses.
The Swedish car-parts maker with headquarters in Stockholm uses plastics for its steering wheels, seat belt components and air bag housings.
Tom Hajkus, communications manager for Autoliv in the Americas, said in an email Sept. 14 that it was “too early to answer” whether a separation could affect current management or leadership, but that initial reactions from customers are positive.
“We believe this potential change will achieve higher returns in passive safety and allow electronics to reach its full growth potential, long-term returns,” he said. “Our top priority is, just as before, performance and execution.”
If a separation occurs, the Swedish auto parts maker estimated the process would likely take around one year to complete.
"Over the last decade, our electronics business has grown and matured next to our leading passive safety business, and today we have two distinct, successful businesses each with its own business drivers," Autoliv's Chairman, CEO and President Jan Carlson said in a statement. "We believe it's time to let them both individually maximize their potential."
Autoliv's electronics business manufactures active safety products, such as automotive radars and cameras with driver assist systems, as well as restraint control and sensing and brake systems. The company said its market is being driven by fast-paced growth and change, particularly in active safety for autonomous vehicles.
The company reported Electronics sales for 2016 were approximately $2.2 billion, with a target to reach $3 billion in revenue in 2020.
Its passive safety business, which consists of airbag systems, steering wheels and seatbelts, reported sales of $7.9 billion in 2016. The company said it anticipates reaching more than $10 billion in revenue in 2020.
Since 2016, Autoliv has been reporting its passive safety and electronics businesses as two separate segments. The company posted total sales of about $10.1 billion in fiscal 2016.