ZF explores selling stake in sensor firm Ibeo, report says

FRANKFURT -- ZF Friedrichshafen is exploring options for its 40 percent stake in sensor specialist Ibeo including a possible sale, three people close to the matter said, as it seeks to cut costs after a series of takeovers.

Ibeo, working with Deloitte, is angling for new investors after receiving a large contract from an automaker, one of the people said.

ZF would be open to selling its stake if the new investor wanted to take control of the company, the person said.

ZF declined to comment, while Ibeo and Deloitte had no immediate comment.

Using a valuation metric applied to its peers, Ibeo's business as a whole would be expected to be worth 200 million to 300 million euros ($235 million to $353 million), including debt.

However, factoring in negative cash flows expected in the next three years, potential buyers are likely to value it at only 100 million to 200 million euros if ZF sells its stake, the people said.

Money-losing Ibeo, which has about 450 employees, lidar sensors that are used to measure a car's surroundings and are seen as an essential technology for enabling autonomous driving.

But these sensors are proving to be complex to develop, forcing suppliers to reappraise their market potential during a time of cost cuts.

ZF has been on an expansion tear, winning U.S. antitrust approval earlier this year for a $7 billion deal to buy rival Wabco.

Saddled with debt from its takeovers and hit by a slump in demand, ZF has embarked on efforts to rein in costs.

In May it was reported that the supplier plans to shed up to 15,000 jobs.