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Wabco purchase to make ZF global tech supplier - CEO

By Simon Warburton | 10 April 2019

"The combined company will be the world-leading supplier of technologies" - ZF CEO Wolf-Henning Scheider on its EUR7bn acquisition of braking systems manufacturer Wabco

"The combined company will be the world-leading supplier of technologies" - ZF CEO Wolf-Henning Scheider on its EUR7bn acquisition of braking systems manufacturer Wabco

ZF says its planned acquisition of braking control systems company, Wabco will make the company the globe's main supplier of technologies.

The German supplier recently announced the EUR7bn (US$8bn) takeover of Wabco, which manufactures braking systems for lorries, buses, and trailers.

The deal is expected to close early next year and "will help make ZF less dependent in the long term" on the cycles of the passenger vehicle market.

"With our planned acquisition of Wabco...everything from one house as a one-stop shop," said ZF CEO, Wolf-Henning Scheider at the company's annual results conference in its Friedrichshafen base. "Wabco has a very attractive product portfolio and very strong market position.

"We already cooperated successfully with them in the past. Of course ZF brings along See, Think, Act [which is] complemented by braking systems. The combined company will be the world-leading supplier of technologies.

"We can provide safety for our customers – they have a partner on their side and for our employees it is also very positive information. It means our commercial vehicle technology will be on a strong foothold. The product from Wabco contributes to the stabalisation of the Group. In addition we will have access to trailers."

ZF added it had boosted 2018 sales 6% year-on-year to EUR36.9bn, but adjusted EBIT fell to EUR 2.1bn from EUR 2.3bn as adjusted EBIT margin slipped to 5.6% from 6.4%

Despite the economic challenges facing manufacturing, ZF was nonetheless buoyed by news it had secured a supply contract with BMW for its enhanced 8-speed automatic transmission including a hybrid variant.

The long-term contract – for an undisclosed sum – represents says ZF the largest order of a automatic transmissions in the history of the company.

In 2018 ZF's commercial vehicle technology (12%) and industrial technology (13%) divisions booked above-average sales growth.

The supplier noted it continued to reduce liabilities incurred from the TRW acquisition, while gross debt fell EUR1.4bn to EUR5bn.

Looking ahead, the supplier said: "Ongoing uncertainties in the political and economic development of many countries, as well as new regulatory frameworks for emission legislation continue to create a tense and challenging environment worldwide."

ZF expects 2019 sales of between EUR37bn and EUR38bn, as well as adjusted EBIT margin of between 5% and 5.5%.