Auto parts supplier Aptiv to acquire 85% of Intercable unit in EV tech push

AUTO parts supplier Aptiv said on Tuesday (Sep 13) it would acquire a majority stake in a unit of Italy’ Intercable for 595 million euros (S$837.3 million), allowing the US company access to technology used in electric vehicles (EVs).

Aptiv will own an 85 per cent stake in the unit, Intercable Automotive Solutions, which manufactures high-voltage busbars that carry more electrical power than traditional cables. It has manufacturing facilities in Europe and Asia.

“Intercable Automotive Solutions is an excellent strategic fit with Aptiv’s Signal & Power Solutions segment,” Aptiv chief executive officer Kevin Clark said in a statement.

Auto parts suppliers are increasingly investing in electric and battery technology to cater to the EV market, which could be worth US$5 trillion over the next decade.

Aptiv, which counts Tesla and General Motors as customers, in January announced a multi-billion-US dollar deal for software developer Wind River to capitalise on the shift to software-oriented vehicles and diversify its revenue stream.

The deal also comes amid automakers’ effort to replicate the success of Tesla’s electric vehicles, as they replace 12-volt wiring systems with much higher voltage cables.

Aptiv’s deal for Intercable Automotive is expected to close before the end of this year, following which the company will operate as a stand-alone business unit.

The transaction is expected to add to Aptiv’s earnings next year. Shares of the company were down 2.7 per cent amid a broader fall in market after data showed monthly U.S consumer prices unexpectedly rose in August.

Goldman Sachs served as financial adviser for the deal to Aptiv while Clifford Chance was the company’s legal adviser. REUTERS