Carve-out or collapse? How automotive suppliers are saving themselves.

The automotive supply industry is undergoing massive change. New drive technologies, disruptive business models, regulatory pressure, and geopolitical uncertainties are making a realignment of many companies inevitable.

Transformation through focus – securing the future

One effective lever for such a transformation, which many suppliers are currently using, is the targeted carve-out of selected business areas. This is also reflected in our latest Baker Tilly survey of automotive suppliers: 23 percent of the companies surveyed are specifically considering a carve-out. The most prominent examples in recent months are ZF and Continental, which have already spun off or intend to spin off automotive-related divisions and business units.

Key objectives of a carve-out

• Sharpening the strategic focus and concentrating clearly on the core business;
• Creating the conditions for a transaction – be it a sale, an IPO, or the establishment of a joint venture;
• Managing investments and financing structures in a smart, targeted, forward-looking, and transparent manner;
• Meeting regulatory requirements; 
• Diversifying risks.

Baker Tilly carve-out excellence – from strategy to execution

Carve-outs are more than just operational separations as an end in themselves – they are strategic initiatives for actively reshaping your corporate portfolio and preparing for the next step. When planned correctly and implemented professionally, they create scope for sustainably strengthening your competitiveness – both for the new entity (“NewCo”) and the remaining entity (“RemainCo”), depending on the objective.

A successful carve-out is a highly complex transformation project. Our Carve-out Management Office (COMO) provides you with structured and comprehensive support throughout all phases – including organizational, tax, financial, and technological aspects:

1. Strategic assessment & definition of target vision: We analyze your corporate structure and identify potential and bottlenecks. On this basis, we develop a viable target operating model (TOM) for RemainCo and NewCo.
2. Organization & Governance: We work with you to shape the separation – from personnel allocation and legal structuring to governance models and service agreements (TSA/SLA).
3. Financial and tax structuring: We develop tax-efficient structures, provide support with accounting, prepare business cases, and, if necessary, evaluate carve-out IPOs or equity carve-outs – always with a focus on investor suitability.
4. IT decoupling & digitalization: We manage the structured decoupling of your ERP, CRM, and other core systems and design NewCo's digital architecture to be scalable and future-proof.
5. Change management & communication: We support you in cultural transformation – both internally and externally – and ensure that employees, investors, and customers are involved and on board.

Our experts. Your contact.

Jannik Bayat, Partner and International Business Leader Consulting, will be happy to assist you with any questions as a long-standing expert in the automotive industry, carve-outs, and PMI (post-merger integration).

This is how we support you with your carve-out