ZF Plans Further Sales: Wind Power Division Could Follow After Harman Deal

ZF, a major automotive supplier, is undertaking further restructuring efforts as it grapples with significant debt. Following the recent sale of its driver assistance systems division to Harman International, a subsidiary of Samsung, for 1.5 billion Euros, the company is now considering the sale of its wind power division.

Strategic Shift Driven by Debt

ZF CEO Mathias Miedreich indicated in an interview with the Handelsblatt that the wind power division could be divested if a mutually beneficial scenario arises, similar to the Harman deal. The company is already streamlining the division to increase flexibility and explore strategic options. This move comes as ZF works to reduce a substantial debt load of nearly eleven billion Euros, accumulated through past acquisitions.

Did You Know? ZF’s annual interest payments on its debt exceed 600 million Euros.

Operational Improvements Amidst Restructuring

Despite the financial challenges, ZF reported a better-than-expected free cash flow of over one billion Euros in fiscal year 2025, doubling previous expectations. The company’s adjusted operating profit also surpassed its target range, exceeding four percent. These positive results suggest that ZF’s restructuring measures are beginning to take effect.

Impact of E-Mobility Project Cancellations

However, ZF’s progress is partially offset by significant write-downs related to the termination of several electromobility projects. These projects, initially valued at over 30 billion Euros, were deemed unprofitable due to the slower-than-anticipated adoption of electric vehicles. This decision resulted in a 1.5 billion Euro accounting loss for 2025, but ZF officials believe it will improve long-term profitability.

Expert Insight: ZF’s decision to shed assets and reassess its involvement in the electric vehicle market reflects a broader trend within the automotive industry, where companies are recalibrating their strategies in response to evolving market conditions and economic pressures.

Future Outlook

The sale of the driver assistance systems division to Harman International is expected to be finalized in the second half of 2026, transferring approximately 3750 ZF employees. While ZF anticipates a 20 percent decrease in revenue following the restructuring, the company aims to become more agile and profitable. Further asset sales could be a possible next step in ZF’s efforts to reduce its debt and focus on core technologies like chassis, electrified transmissions, commercial and industrial technology, and the aftermarket business.

Frequently Asked Questions

What is driving ZF’s restructuring efforts?

ZF’s restructuring is primarily driven by its high debt load of nearly eleven billion Euros, resulting from past acquisitions. The company is seeking to reduce this debt through asset sales and improved cash flow.

Which divisions are currently under consideration for sale?

The wind power division is currently being considered for sale, according to ZF CEO Mathias Miedreich, if a suitable “win-win-win” scenario can be achieved.

What impact have electromobility project cancellations had on ZF’s financial performance?

The cancellation of several electromobility projects resulted in a 1.5 billion Euro accounting loss for 2025, due to projects not achieving expected profitability.

How might ZF’s strategic shift impact the broader automotive supply chain?