STOCKHOLM, April 23, 2020 /PRNewswire/ -- The
automotive technology company, Veoneer, Inc. (NYSE: VNE) and
(SSE: VNE SDB), has, following a strategic review, decided to
exit the brake control business and has signed a non-binding
agreement with a well-established automotive supplier to divest
Veoneer's yet to be launched US brake control programs.
Following the strategic review initially launched in
April 2019, Veoneer has decided to
focus on its core Electronics business and exit the brake control
business. Veoneer is a leading autotech company focused on hardware
and software in the safety domain. Following this divestiture
Veoneer intends to further strengthen this core product offering
and continue to build on this leading position.
Through this divestiture, Veoneer expects to achieve total
reductions of negative cash flow of more than $80 million for 2020 and 2021 as these programs
are in an investment and ramp-up phase ahead of major launches. The
divestiture to a well-established automotive supplier follows the
completion of the sale of the Asian portion of Veoneer's brake
control business (VNBS) on February
3, 2020. The new company will take over the entire
team which will be able to continue to work on these important
programs. The agreed purchase price is $1.
In conjunction with the transfer, Veoneer will incur a non-cash
write-down of net assets related to VBS, with a negative net income
effect to Veoneer of approximately $144
million in the first quarter of 2020. The write-down is a
non-cash item, which will not affect cash flow, financial targets
or the business plan of the Electronics business. The total net
income effect from the divestiture of our brake control segment,
including both VNBS Asia and the US operations, is expected to be
negative by approximately $65 million
as the VNBS Asia transaction resulted in a gain of $77 million.
Veoneer will retain a minor legacy brake control business in the
US with total expected lifetime sales of around $70 million.
The final agreement is expected to close during the second
quarter of 2020.
This report is information that Veoneer, Inc. is obliged to
make public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency of
the EVP Communications and IR set out above, at 22:30 CET on
Thursday April 23, 2020.
Veoneer, Inc. is a worldwide leader in
automotive technology. Our purpose is to create trust in mobility.
We design, manufacture and sell state-of-the-art software, hardware
and systems for occupant protection, advanced driving assistance
systems, and collaborative and automated driving to OEMs globally.
Headquartered in Stockholm,
Sweden, Veoneer has 8,900 employees in 13 countries. The
Company is building on a heritage of close to 70 years of
automotive safety development. In 2018, Veoneer became an
independent, publicly traded company listed on the New York Stock
Exchange (NYSE: VNE) and on the Nasdaq Stockholm (SSE: VNE
SDB).
Safe Harbor Statement: This release contains
statements that are not historical facts but rather forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements include those
that address activities, events or developments that Veoneer, Inc.
or its management believes or anticipates may occur in the future.
All forward-looking statements are based upon our current
expectations, various assumptions and/or data available from third
parties. Our expectations and assumptions are expressed in good
faith and we believe there is a reasonable basis for them. However,
there can be no assurance that such forward-looking statements will
materialize or prove to be correct as forward-looking statements
are inherently subject to known and unknown risks, uncertainties
and other factors which may cause actual future results,
performance or achievements to differ materially from the future
results, performance or achievements expressed in or implied by
such forward-looking statements. Numerous risks, uncertainties and
other factors may cause actual results to differ materially from
those set out in the forward-looking statements, including general
economic conditions, fluctuations in the global automotive
market, our ability to complete the transaction contemplated by the
non-binding agreement with a well-established automotive supplier,
which is subject to the negotiation and documentation of definitive
agreements, and the impacts of the coronavirus (COVID-19) on the
Company's financial condition and business operations. For any
forward-looking statements contained in this or any other document,
we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995, and we assume no obligation to update publicly or
revise any forward-looking statements in light of new information
or future events, except as required by law.
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The following files are available for download:
https://mb.cision.com/Main/17380/3095865/1235144.pdf
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Veoneer to focus on
core Electronics business
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For more information please contact:
Thomas
Jönsson, EVP Communications & IR, tel +46
(0)8 527 762 27
Ray Pekar, VP Investor Relations,
tel +1 (248) 794-4537
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SOURCE Veoneer