US-listed auto parts manufacturer Delphi Automotive has agreed to acquire British cable equipment maker HellermannTyton Group for around 1.1 billion pounds ($1.7 billion) in a drive to make inroads in the surging connected-car market.
Delphi announced it wants HellermannTyton, which builds products for fastening, fixing, and protecting cables, to assist the supplier in its strategy to grow its business in the increasingly soaring segment of vehicles that connect to the Internet and smart devices such as phones and tablets. “With consumers now demanding more connectivity in their vehicles, electrical architecture is the enabler to that added vehicle content,” commented Delphi Chief Executive Kevin Clark. The buyout is the latest move in the world of auto parts makers, with the companies now moving beyond the material production of things such as nuts and bolts into the high-profit area of electronics and software components. It also underscores the sector’s move towards consolidation – back in May competitor Continental AG purchased software company Elektrobit Automotive and last September, Germany’s ZF Friedrichshafen struck a deal to absorb U.S.-based TRW Automotive Holdings Corp. In the latter transaction the combination between one of the biggest producers of automatic gearboxes with a maker of automatic safety products resulted in one of the largest automotive suppliers in the world.
Delphi is keen on expanding its operations into vehicle connectivity and fuel efficiency as these are high-margin and high-growth areas of the automotive industry because increasingly tougher rules on safety and pollution compel today’s vehicles to become ever more intelligent. Delphi also announced a series of smaller investments – the purchase of software company Ottomatika and a strategic investment in 3D LiDAR sensing company, Quanergy.