The Germany-based cable and harnessing manufacturing firm is exploring sale or flotation of its wire and cables division as part of a broader review of the company’s group structure.
July 10, 2019
Leoni is preparing a separation of its Wire & Cable Solutions (WCS) division through a stock market listing or sale, including the option of a partial sale. However, no final decision has been taken in this regard. Following a potential separation, Leoni’s primary focus would be on the development of its Wiring Systems Division (WSD). To this end, Leoni has begun to mandate respective advisors.
The decision to prepare a separation of its WCS division followed a further review of the existing group structure and strategy for each division in the context of the previously announced VALUE 21 programme. This also included a review of the optimal future ownership structure of WCS and WSD to determine how both divisions can achieve their full potential.
As reported in Ad-hoc announcement by the company, Leoni’s Board of Directors sees only very limited synergies between both divisions and intends to increase their operational independence. In this context, corporate support functions will transfer from the holding company to the divisions. WCS increasingly focuses on advanced and intelligent cable solutions and services and WSD further enhances its energy and data solutions and services related capabilities.
The implementation of the VALUE 21 programme is progressing according to plan to achieve sustainable gross cost savings targets of EUR 500 million per year by 2022 for the existing group (with a targeted EBIT margin impact of +2‑3%-pts and a targeted FCF yield impact of +4-5%-pts). Around 75% of the savings are expected to be realized in WSD.
