Aptiv Considers Selling Electrical Distribution Systems Business

According to foreign media reports, insiders recently revealed that Aptiv is currently engaging with potential buyers for its Electrical Distribution Systems (EDS) business unit. The company announced plans to spin off this business in January of this year.

According to informed sources, Aptiv's valuation for the business could reach $5 billion, and the sale may attract interest from strategic investors and private equity firms.

The aforementioned sources also indicated that the discussions are still in the early stages, and Aptiv may still decide to abandon the sale and instead proceed with its original plan for a spin-off. A representative from Aptiv declined to comment on the report.

Image source: Aptiv

In January of this year, Aptiv announced that its board of directors had approved the spin-off of its electrical distribution systems business. Through the spin-off, Aptiv and the business will be better able to focus on development in their respective areas of product strength.

Aptiv's Electrical Distribution Systems (EDS) provide low-voltage and high-voltage electrical architectures for the automotive and commercial vehicle markets. After the spin-off or sale, Aptiv will retain its business, including industrial components and a range of related products for various industries such as aerospace and telecommunications. In the automotive sector, Aptiv's main customers include the Big Three of Detroit—General Motors, Ford, and Chrysler—as well as major automotive manufacturers like the Volkswagen Group and BMW Group.

Aptiv previously stated that it expects to complete the spin-off of its electrical distribution systems business by March 31, 2026. After the spin-off, the company will focus on providing complete "sensor-to-cloud" technology, including advanced driver assistance systems and in-vehicle software.

An industry analyst previously stated, "It is significant for Aptiv to spin off its electrical distribution systems business, as this business has an adjusted EBITDA margin of 9.5% in 2024, which is much lower than the 18.8% EBITDA margin of the company's other businesses. Aptiv's spin-off move could create value for the company, and Aptiv's stock may achieve a higher price-to-earnings ratio."

Since announcing its spin-off plan in January, Aptiv's stock price has risen by more than 35% on the New York Stock Exchange, and the company's market value is currently close to $18.5 billion.