Driving Change

Bosch Acquires Key to Car of the Future

Volkmar Denner BOSCH
In the driving seat, Bosch head Volkmar Denner.
  • Why it matters

    Why it matters

    Bosch is developing autonomous-driving systems but lacked expertise in advanced steering systems. Its estimated €1 billion takeover of ZF Lenksysteme guarantees access to the technology.

  • Facts


    • Cost of deal between car parts makers undisclosed.
    • Bosch revenues after acquisition will exceed €50 billion ($65 billion).
    • Bosch competing with Continental for global market leadership.
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The increasing use of computers and the internet to assist driving is a strategically important area for Bosch. This week, the company completed the takeover of auto-parts maker ZF Lenksysteme (ZFLS), securing access to important technology for autonomous driving.

Bosch already owned half of the company, and both sides are keeping quiet about the price paid. Industry experts estimate Bosch will have paid about €1 billion once the deal is complete.

ZFLS currently makes 60 percent of its revenues, recently €4.1 billion ($5.3 billion), from electric steering systems. Power assisted steering is made possible by electric motors, which are easier to build into driver-assistance systems, such as emergency breaking and skid prevention, than traditional equipment.

Bosch, based in the southern state of Baden-Württemberg, has developed a system for moving vehicles and trailers via a smart phone and is getting close to production. Similar systems for commercial vehicles are undergoing trials. The company was therefore keen to secure ZFLS’s steering know-how.

“The company is one of the technology leaders in the future area of electric steering, and this is the basic technology for automated driving”

Volkmar Denner, Bosch Chief Executive

“The company is one of the technology leaders in the future area of electric steering, and this is the basic technology for automated driving, for more efficient vehicles and electric cars,” said Bosch head Volkmar Denner.

For months there had been talk of the partners separating. But in the industry, there was no doubt Bosch would take over. “The company had hardly any choice,” said automobile industry analyst Frank Schwope of Norddeutsche Landesbank, one of Germany’s largest banks.

Mr. Denner said there would be no fundamental change in the steering division strategy, suggesting Bosch would have achieved  its strategic objectives through its existing partnership with ZFLS.

Because of German accounting regulations, the joint venture has not been consolidated. Bosch is expecting the transaction to be completed in spring 2015. In 2013, Bosch increased its revenues by 3.1 percent to €46.1 billion. When the steering systems business is included, the manufacturer’s revenues will exceed €50 billion, strengthening its position in relation to rival Continental in the battle for global market leadership among automotive suppliers.



This article was translated by Bob Breen. Vinny Kuntz also contributed to the story. Contact the author: buchenau@handelsblatt.com

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