“This business can grow very quickly, but it has relatively low margins. It needs fresh capital,” which is why ZF had been looking for a partner, said Klein.
ZF wants to use the proceeds to reduce debts.
The joint venture agreement is expected to become effective within six to nine months of signing pending regulatory approvals.
Klein, who said that he did not rule out Foxconn taking over further shares later, does not anticipate any major difficulties during the German government’s review of the transaction.
Berlin last year blocked the sale of Munich-based chip supplier Siltronic to a Taiwanese rival over tensions with China.
ZF ranks third on the Automotive News Europe list of top 100 global suppliers, with sales to automakers of $39.3 billion in 2021.
