Aptiv’s board has approved a plan to separate its Electrical Distribution Systems (EDS) business from Aptiv, creating two independent companies.
Aptiv said EDS’s differentiated design and development capabilities enable the optimisation of vehicle architecture systems and thereby reduce vehicle weight, mass, and costs for OEM customers. It said EDS’s full range of low voltage and high voltage power, signal, and data distribution solutions uniquely position the business to enable the increasing demand for feature rich, higher contented vehicles that require optimised vehicle architectures, including electric vehicles. Moreover, as EV penetration continues to outpace the growth in global vehicle production, EVs represent a key growth market for EDS, the company said.
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“We have a long track record of transforming Aptiv through operational changes and organic and inorganic portfolio shifts to best position our businesses in a dynamic environment,” said Aptiv CEO Kevin Clark.
“By enhancing strategic and operating focus, we are positioning both Aptiv and EDS to more effectively address the evolving needs of our customers and to further capitalise on market opportunities,” he said.
“Following completion of the transaction, Aptiv will have a portfolio of advanced software and hardware technologies and highly engineered, mission-critical products that are aligned with global megatrends fuelling growth in diverse end markets. The result will be a high growth, high margin business with strong cash flow generation to support continued organic and inorganic investment in differentiated products and solutions and further penetration of adjacent markets, including aerospace and defence, telecommunications, commercial vehicle, and industrial, and return of excess capital to shareholders.”
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