Germany's ZF Lifetec unit attracting suitors

MUNICH: ZF Friedrichshafen AG's sale of its airbags and seat belt business is attracting interest from suitors including automotive supplier Adient Plc, according to people familiar with the matter.

Private equity firms American Industrial Partners and FountainVest Partners are also pursuing the ZF unit, the people said.

The business, known as ZF Lifetec, could fetch several billion euros in a sale, according to the people.

Deliberations are ongoing and there's no certainty they will lead to a transaction, the people said.

Representatives for ZF, Adient and AIP declined to comment. A spokesperson for FountainVest didn't respond to requests for comment.

German parts makers are seeking ways to slash costs, as a slump in car sales hits demand for their products.

ZF, Continental AG, Schaeffler AG and Robert Bosch GmbH have said in recent months that they're planning to axe thousands of jobs in response to the downturn.

Some of them are also selling or spinning off non-core assets, including ZF and Continental.

ZF is reportedly examining the complete spinoff of the electrified drive technologies division.

ZF takes its name from its headquarters in Friedrichshafen, the southern German town on Lake Constance. It traces its roots back to airship pioneer Ferdinand von Zeppelin.

Hong Kong-based FountainVest has portfolio company assets of more than $53 billion in 40 different countries, according to its website.

The company has invested in everything from US automotive-related assets to Finnish sports gear makers.

American Industrial Partners is a mid-market buyout firm with over $16 billion in assets that focuses on industrial companies.

The firm in 2023 bought Veoneer Inc.'s restraint control systems business, which can trigger the tightening of safety belts and deployment of airbags.

Adient, which makes car seats, was spun out of automotive supplier Johnson Controls Inc. in 2016.

Any deal for ZF Lifetec would be a big bite, given that Adient's US-listed shares have fallen nearly 60% over the past year, valuing the firm at about $1.2 billion.