German transmission  and automotive technology giant, ZF has announced it is buying US brake technology specialist Wabco, for a reported $AUD10 (US$7 billion).

ZF says the purchase will be a meeting between two companies which are part of a Next Generation Mobility strategy aimed at commercial vehicles, connectivity, automation and electric propulsion.

“Joining forces with ZF will create a leading global technology company well positioned to capitalise on future demand for autonomous, efficient and connected commercial vehicles,” said Wabco chairman and CEO Jacques Esculier.

“It has become increasingly apparent that the industry faces a new level of strategic complexity and will attract new competition, including new entrants from outside the sector able to bring unprecedented resources to the table,” he said.

“This demands Wabco make critical choices in the role it will play in the future industry value chain.

“We anticipate significant in house investment and new alliances will be necessary to address the full scope of required technologies for these new domains,” he added.

“We believe this is the appropriate moment to join forces with ZF providing access to critical technology and the global size and scale to de-risk the return on investment required as the industry transforms.”

ZF said buying Wabco will enable it to expand its expertise to include commercial vehicle braking systems for the first time.

“This will play a central role in the control of automated driving functions including emergency braking of trucks and trailers,”

“ZF expects that automated driving functions will primarily be implemented for commercial vehicles and in areas with low complexity and traffic  such as factory sites, airports, mines, ports and in agriculture.

“The combination of both businesses is expected to accelerate the development of new technologies to enable autonomous commercial vehicle functions making ZF less dependent on the passenger car industry,” he said.

“The planned strategic acquisition is consistent with ZF’s goal to develop and deliver technology solutions that make cars and commercial vehicles see, think and act in order to reduce emissions and increase road safety.

ZF is expecting to close the transaction early next year.