Aptiv PLC announced that its Board of Directors has unanimously approved a plan to separate its Electrical Distribution Systems (EDS) business into a new, independent public company. This strategic move aims to create two distinct entities, each optimized to serve its respective markets and enhance shareholder value.
The separation is expected to be effected through a tax-free spin-off to Aptiv shareholders, who will retain their existing Aptiv shares and receive a pro-rata dividend of shares in the new EDS company. The transaction is targeted for completion by March 31, 2026, subject to customary conditions and regulatory approvals.
Following the spin-off, the 'new Aptiv' will focus on advanced software and hardware technologies, including Advanced Safety & User Experience and Engineered Components Group, targeting mid-to-high single-digit revenue growth and low-to-mid teens U.S. GAAP operating income margins. The 'new EDS' will be a leading global supplier of low and high voltage electrical architectures for automotive and commercial vehicle markets, aiming for mid-single-digit revenue growth and mid-to-high single-digit GAAP operating income margins.
Aptiv affirmed its full-year 2024 financial outlook in connection with this announcement. This separation is a pivotal step in Aptiv's transformation journey, designed to sharpen strategic and operational focus, allowing both companies to better capitalize on market opportunities and drive greater success.
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