Motorola Sells Auto Electronics Biz for $1B.

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Online staff

To allow it to sharpen its strategic focus on communications solutions that advance the vision of seamless mobility, Motorola Inc. said today Hanover, Germany-based automotive component supplier Continental AG will acquire its automotive electronics business for approximately $1 billion in cash in a deal that includes Motorola's controls, sensor, interior electronics and telematics businesses.

The acquired business will be integrated into Continental's automotive systems division, which focuses on integrating active and passive driving safety, developing innovative electric drives and making available intelligent body electronics, and reported 2005 sales of $6.5 billion (5.2 billion euros).

Continental said the acquisition marks another milestone in its mission to make individual mobility safer, increases its product portfolio and R&D capabilities in body and sensor electronics as well as powertrain and chassis controls. This move also doubles overall sales of Continental's automotive systems division in North America, and adds telematics to Continental's product range.

The company believes telematics will further enhance its active and passive vehicle safety offerings and allow Continental to intensify and expand the integration of features that help avoid collision with features of post crash safety/emergency assistance of occupants.

Continental's executive board chairman Manfred Wennemer said in a statement, "Motorola's automotive electronics business is a perfect fit with our strategy of providing sophisticated safety systems to our customers. They are a premier telematics supplier and possess profound experience in this field. We are thus adding a successful enterprise with well-educated, highly motivated and innovative employees in a field of our business predicted to generate double digit growth in the upcoming years. This is a perfect example of our strategy to improve our sales and operating profits with organic growth as well as sound acquisitions."

Greg Brown, president of Motorola's networks and enterprise business, who oversees the automotive electronics unit noted, "This transaction positions Motorola for continued success by further sharpening our strategic focus on communications solutions that advance our vision of seamless mobility."

Motorola's automotive unit currently is a component of its networks and enterprise business that employs nearly 4,500 employees worldwide of which approximately 80 percent are based in North America. Manufacturing facilities and development engineering centers include locations in North America, Japan, China, Mexico, France, U.K, and Germany.

Major customers include General Motors, Ford, Daimler Chrysler, BMW and Cummins. The business has three major product lines focusing on electronics parts and supplies: telematics (embedded wireless vehicle communications); powertrain and chassis control (steering, suspension, occupant detection electronics and stability control); and body electronics (heating, ventilation, air conditioning and electronics for power doors, power seats, window lift and electric mirrors).

Continental said the integration of Motorola's automotive unit will enhance its ability to offer our customers long-term technology solutions in the areas of telematics, safety electronics, powertrain as well as interior and sensor technologies.

Dr. Karl-Thomas Neumann, president of Continental's automotive systems division noted, "The addition of telematics allows Continental automotive systems to take active/passive safety to the next level of functionality and performance. It will be integrated as a new business unit into the division automotive systems."

"The integration of telematics opens the door to embedded car-to-car digital communication and vehicle-to-infrastructure communication, taking intelligent vehicle safety to the next level. We see great potential for this new, expanded capability as the automotive industry shifts focus towards more active safety. Finally, the acquisition of laboratories and R&D centers will increase our testing and leading-edge research capabilities and will further expand our engineering resources," Neumann added.

The transaction is expected to be completed in the first half of the year.