Delphi Automotive is planning to spin off its Powertrain Systems segment into a new, independent publicly traded company, which will allow it to focus on technology for electrically powered and self-driving vehicles.
The transaction is expected to be completed by next March and the company stated that its shareholders will hold shares in both the companies.
Delphi board’s independent director Timothy Manganello, will become the new company’s non-executive chairman board of directors upon separation.
The present senior vice president and president of the Powertrain Systems, Liam Butterworth, will become president and CEO of the new entity.
After completion of the transaction, the company's Electrical and Electronic Architecture (E/EA) and Electronics and Safety (E&S) divisions will remain as its core businesses.
The focus of these divisions will be more on the development of safe, green and connected technology solutions.
On the other hand, it stated that that powertrain division is focused on optimising vehicle propulsion systems by enhancing environmental efficiency and performance. The unit has about 20000 employees worldwide with 5000 engineers and its earnings last year were about $4.5bn.
Delphi CEO and president Kevin Clark said: "As a standalone business, Powertrain will be well positioned to pursue a focused global growth strategy while further enhancing its portfolio of advanced propulsion technologies, power electronics solutions and aftermarket business.
“Tim and Liam are talented, well-respected leaders with decades of experience in Powertrain businesses, longstanding customer relationships and proven track records in operations management, making them ideally qualified to lead Powertrain into the future and to create long-term value for all of its stakeholders.”
Clark said: "Today's announcement represents an exciting opportunity for our businesses by creating two independent companies, each with a distinct product focus, a proven business model, and the flexibility to pursue accelerated investments in advanced technologies that solve our customers' most complex challenges.
"At a time of unprecedented industry change, the underlying strength of both our operating businesses and strategic partnerships will allow each company to focus even more sharply on its unique opportunities, continue to develop the very best advanced technologies, and help our customers navigate the road ahead."
