Aptiv plans to separate electrical distribution systems business to focus on advanced driver-aid tech

From Investing.com: 2025-01-22 12:21:18

Aptiv plans to spin off its electrical distribution systems (EDS) business to focus on advanced driver-aid tech, boosting shares by 5%. The move aims to increase profitability after a sales forecast cut in October. The EDS division, with a lower margin, is set to be separated by March 31, 2026.

Analyst Garrett Nelson sees the spin-off as a “value-creating move” with Aptiv’s shares potentially commanding a higher multiple. The company will shift focus post-separation to sensor-to-cloud technology and cater to major clients like Detroit Three, Volkswagen, and BMW.

The auto industry struggled in the second half of 2024 due to Chinese competition, consumer demand decline, and economic challenges. Manufacturers prioritize higher-margin SUVs and hybrids. President Trump revoked an executive order on EVs, impacting the industry’s future direction.



Read more at Investing.com: Aptiv shares jump on plan to separate electrical distribution systems business By Reuters