Autoliv to spin off its electronics segment
Autoliv (LIV) announced that its Board of Directors has concluded its strategic review and decided to prepare for a spin-off of its Electronics business segment, creating a new, independent publicly traded company during the third quarter of 2018.
The analyses conducted under the strategic review concluded that the assumptions made at the time of the initial announcement in September 2017 to separate the company hold true.
Through the separation, additional value for shareholders and other stakeholders will be created by the ability to better address two distinct, growing markets with leading product offerings.
The spin-off will be by a payment of a dividend of the common stock of the new Electronics company on a pro rata basis to the holders of common shares of Autoliv as of a yet to be determined record date.
As part of the preparation for the spin-off, the Electronics business is expected to receive a cash injection from Autoliv, with the underlying objective of Autoliv to remain strong investment grade.
The intent is for the spin-off to be tax free to stockholders both in the US and Sweden.
A Form 10 registration statement for the transaction will be filed with the Securities and Exchange Commission during the first half of 2018.
It will include historical financial information for the Electronics business on a stand-alone basis for the fiscal years 2015-2017 and other details regarding the proposed spin-off.
After the spin-off, Autoliv’s current Passive Safety segment would continue to operate under the Autoliv name, with continued listings on the New York Stock Exchange and Nasdaq Stockholm.
The Electronics business will assume a new company name to be announced at a later stage.
It is also expected to be listed in the United States and Sweden.
Both companies are to be headquartered in Stockholm, Sweden.
Forward looking full year 2018 indications for the stand-alone entities are expected to be given in connection with Autoliv’s Q4 2017 earnings release.
The spin-off is expected to be completed during the third quarter of 2018 subject to market, regulatory and certain other conditions, including approval by Autoliv’s board of directors.
There can be no assurance regarding the ultimate timing of the spin-off or that the spin-off will ultimately occur. Further updates to the progress of the separation and stock market listing process will be provided in a timely manner.
LIV closed at $127.75. It last traded at $129.25.
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