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Hon Hai Technology (aka Foxconn) has agreed to acquire a 50% stake in ZF Chassis Modules which specialises in passenger car chassis systems.

The joint venture (JV) is aimed at “accelerating and expanding automotive and supply chain opportunities with top-tier customers”, the pair said in a statement.

The ZF Group unit was valued at EUR 1bn.

Reuters reported ZF planned to use the proceeds to reduce debt.

“We are also keen to explore more partnership opportunities with the ZF Group in the broader transportation and mobility [sectors],” said Young Liu, Foxconn chairman and CEO.

The companies expect the JV agreement to take effect between six and nine months after signing, subject to the usual approvals.

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By GlobalData

The unit has 25 locations and the company expects sales of EUR 4bn this year.