Samsung Unit to Buy ZF’s Driver Assistance Arm for €1.5 Billion
By Yoolim Lee and William Wilkes
December 23, 2025 at 3:00 AM EST
Updated on December 23, 2025 at 4:05 AM EST
Takeaways by Bloomberg AI
- Harman International is buying a key driver-assistance business from Germany's ZF Group for €1.5 billion.
- The deal will help secure Samsung a leading position in car-use smart cameras through ZF's radar and automotive computing operations.
- The sale offers ZF financial breathing room as higher refinancing costs weigh on its balance sheet.
Samsung Electronics Co.-owned Harman International is buying a key driver-assistance business from Germany’s ZF Group for €1.5 billion ($1.8 billion), as financial stress across Europe’s auto-supplier sector forces companies to rethink their portfolios.
The deal will help secure South Korea’s biggest technology group a leading position in car-use smart cameras through ZF’s radar and automotive computing operations, Harman said Tuesday. Samsung, which acquired Harman in 2017 for $8 billion, has been seeking greater scale in automotive electronics and audio as vehicles become increasingly software-driven.
Harman is a major supplier of infotainment, audio and connected-car systems to global automakers, with sound systems branded under names such as JBL, Harman Kardon and Bang & Olufsen. Its customers include manufacturers such as BMW AG, Volkswagen AG and Volvo Car AB, and Samsung has been positioning the unit as the spearhead of its automotive push.
The deal will combine Harman’s cockpit expertise with market-leading camera technology for the next generation of so-called software-defined cars. Samsung expects the advanced driver assistance systems and centralized controller market to grow from 62.6 trillion won ($42.3 billion) in 2025 to 189.3 trillion won by 2035 driven by safety and convenience demand.
For ZF, a major supplier of gearboxes and other components to BMW and Volkswagen, the sale offers financial breathing room as higher refinancing costs weigh on its balance sheet. Rising interest expenses, combined with weakening returns, have added to pressure on the company’s finances and have played a role in job cuts decisions. Those reductions have also hit ZF’s electric-vehicle division, underscoring the strain facing German auto suppliers as the transition to EVs slows and competition from Chinese manufacturers intensifies.
ZF has built a strong presence in advanced driver-assistance systems — the sensors, cameras, radar and software behind features such as adaptive cruise control, automated emergency braking and lane-keeping assistance — supplying control units and safety electronics to major automakers and positioning its portfolio for software-defined vehicle architectures.
The sale marks another example of European automotive groups stepping back from capital-intensive, cutting-edge technologies even as demand for traditional combustion-engine components is expected to decline. High development costs, cutthroat competition from Chinese rivals and global technology firms, and uncertain returns have made advanced electronics increasingly difficult for legacy suppliers to carry on their own.
Mathias Miedreich, ZF’s chief executive officer, said the transaction would help reduce the company’s debt while allowing it to concentrate resources on its core technologies, where it sees itself as a global leader.
The pressures are rippling across Germany’s auto sector, which has shed nearly 50,000 jobs this year, with suppliers the fastest-shrinking segment of what has long been one of the country’s industrial backbones, according to federal statistics agency Destatis. Insolvencies among automotive companies climbed to a record last year, based on Destatis data going back to 2010.
Since Samsung’s acquisition, Harman has been operating as a standalone subsidiary, doubling its revenue, partly through acquiring 10 companies.
— With assistance from Ville Heiskanen
bloomberg.com |
