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Acquisitions And Divestitures (Tables)
 3 Months Ended
Mar. 31, 2020
Business Acquisition [Line Items]  
Acquisitions and Divestitures ACQUISITIONS AND DIVESTITURES
Acquisition of gabo Systemtechnik GmbH
On November 19, 2019, Aptiv acquired 100% of the equity interests of gabo Systemtechnik GmbH (“gabocom”), a leading provider of highly-engineered cable management and protection solutions for the telecommunications industry, for total consideration of $311 million, net of cash acquired. The results of operations of gabocom are reported within the Signal and Power Solutions segment from the date of acquisition. The Company acquired gabocom utilizing cash on hand.
The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary basis using information available, in the fourth quarter of 2019. The preliminary purchase price and related allocation to the acquired net assets of gabocom based on their estimated fair values is shown below (in millions):
Assets acquired and liabilities assumed
Purchase price, cash consideration, net of cash acquired$311  
Property, plant and equipment$25  
Intangible assets75  
Other liabilities, net(11) 
Identifiable net assets acquired89  
Goodwill resulting from purchase222  
Total purchase price allocation$311  
Intangible assets include $66 million recognized for the fair value of customer-based assets with estimated useful lives of approximately 9 years and $9 million recognized for the fair value of the acquired trade name, which has an estimated useful life of approximately 15 years. The estimated fair value of these assets was based on third-party valuations and management’s estimates, generally utilizing income and market approaches. Goodwill recognized in this transaction is primarily attributable to synergies expected to arise after the acquisition and the assembled workforce of gabocom, and is not deductible for tax purposes.
The purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding liabilities assumed, including, but not limited to, contingent liabilities, revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals and valuations related to property, plant and equipment and intangible assets, and certain tax attributes.
The pro forma effects of this acquisition would not materially impact the Company’s reported results for any period presented, and as a result no pro forma financial statements were presented.
Acquisition of Falmat Inc.
On May 14, 2019, Aptiv acquired 100% of the equity interests of Falmat Inc. (“Falmat”), a leading manufacturer of high performance custom cable and cable assemblies for industrial applications, for total consideration of $25 million, net of cash acquired. The results of operations of Falmat are reported within the Signal and Power Solutions segment from the date of acquisition. The Company acquired Falmat utilizing cash on hand.
The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary basis using information available, in the second quarter of 2019. The preliminary purchase price and related allocation to the acquired net assets of Falmat based on their estimated fair values is shown below (in millions):
Assets acquired and liabilities assumed
Purchase price, cash consideration, net of cash acquired$25  
Intangible assets$12  
Other assets, net6  
Identifiable net assets acquired18  
Goodwill resulting from purchase7  
Total purchase price allocation$25  
Intangible assets primarily include amounts recognized for the fair value of customer-based assets, which will be amortized over their estimated useful lives of approximately 9 years. The estimated fair value of these assets was based on third-party valuations and management’s estimates, generally utilizing income and market approaches. Goodwill recognized in this transaction is primarily attributable to synergies expected to arise after the acquisition and the assembled workforce of Falmat, and is not deductible for tax purposes.
The purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding liabilities assumed, including, but not limited to, contingent liabilities, revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals and valuations related to property, plant and equipment and intangible assets, and certain tax attributes.
The pro forma effects of this acquisition would not materially impact the Company’s reported results for any period presented, and as a result no pro forma financial statements were presented.
Acquisition of Dynawave Inc.
In March 2020, Aptiv agreed to acquire Dynawave Inc. (“Dynawave”), a specialized manufacturer of custom-engineered interconnect solutions for a wide range of industries, for total consideration of approximately $22 million. The acquisition is subject to the satisfaction of customary closing conditions and the receipt of regulatory and other approvals, and is expected to close by the third quarter of 2020. The Company expects to acquire Dynawave primarily utilizing cash on hand. Upon completion, Dynawave will become part of the Signal and Power Solutions segment.
Technology Investments
The Company has made technology investments in certain non-consolidated affiliates for ownership interests of less than 20%, as described in Note 2. Significant Accounting Policies. These investments do not have readily determinable fair values and are measured at cost, less impairments, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer.
During the fourth quarter of 2019, the Company’s Advanced Safety and User Experience segment made a $6 million investment in Krono-Safe, SAS, a leading software developer of safety-critical real-time embedded systems.
During the first quarter of 2019, the Company’s Advanced Safety and User Experience segment made an additional $3 million investment in Otonomo Technologies Ltd. (“Otonomo”), a connected car data marketplace developer. This investment was in addition to the Company’s $15 million investment made in the first quarter of 2017.
As of March 31, 2020, the Company had the following technology investments, which are classified within other long-term assets in the consolidated balance sheets:
Investment Name  Segment  Investment DateInvestment
(in millions)
Krono-Safe, SASAdvanced Safety and User Experience  Q4 2019$6  
Affectiva, Inc.Advanced Safety and User Experience  Q4 201815  
Innoviz TechnologiesAdvanced Safety and User Experience  Q3 201715  
LeddarTech, Inc.Advanced Safety and User Experience  Q3 201710  
Valens Semiconductor Ltd.Signal and Power Solutions  Q2 201710  
Otonomo Technologies Ltd.Advanced Safety and User Experience  Q1 2017; Q1 201937  
Quanergy Systems, IncAdvanced Safety and User Experience  Q2 2015; Q1 20166  
Other investmentsAdvanced Safety and User Experience  Q4 2018; Q3 20192  
$101  
During the three months ended March 31, 2019, the Company’s investment in Otonomo was remeasured to a fair value of $37 million, based on a subsequent round of financing observed to be for identical or similar investments of the same issuer. As a result, the Company recorded a pre-tax unrealized gain of $19 million to other income, net during the three months ended March 31, 2019.
There were no other material transactions, events or changes in circumstances requiring an impairment or an observable price change adjustment to these investments. The Company continues to monitor these investments to identify potential transactions which may indicate an impairment or an observable price change requiring an adjustment to its carrying value.
Autonomous Driving Joint Venture
On March 26, 2020, Aptiv completed the transaction with Hyundai Motor Group (“Hyundai”) to form a new joint venture focused on the design, development and commercialization of autonomous driving technologies. Under the terms of the agreement, Aptiv contributed to the joint venture autonomous driving technology, intellectual property and approximately 700 employees for a 50% ownership interest in the newly formed entity. Hyundai contributed to the joint venture approximately $1.6 billion in cash, along with vehicle engineering services, research and development resources and access to intellectual property for a 50% ownership interest in the newly formed entity. As a result, subsequent to the closing of the transaction, the newly formed joint venture is expected to fund all of its future operating expenses and investments in autonomous driving technologies for the foreseeable future. Consequently, Aptiv is no longer required to fund these investments and expenses, which approximated $180 million for the year ended December 31, 2019 prior to the joint venture formation. Upon closing of the transaction, Aptiv deconsolidated the carrying value of the associated assets and liabilities contributed to the joint venture, previously classified as held for sale, and recognized an asset of approximately $2.0 billion within Investments in affiliates in the consolidated balance sheet, based on the preliminary fair value of its investment in the newly formed joint venture. The Company recognized a pre-tax gain of approximately $1.4 billion in the consolidated statement of operations (approximately $5.63 per diluted share during the three months ended March 31, 2020), net of transaction costs of $22 million, based on the difference between the carrying value of its contribution to the joint venture and the preliminary fair value of its investment in the newly formed entity. The estimated fair value of Aptiv’s ownership interest in the newly formed joint venture was determined primarily based on third-party valuations and management estimates, generally utilizing income and market approaches. The estimated fair value is preliminary and could be revised as a result of additional information obtained or adjustments made due to the completion of independent appraisals and valuations. The effects of this transaction would not materially impact the Company’s reported results for any period presented, and the transaction did not meet the criteria to be reflected as a discontinued operation.
In connection with the closing of the transaction, Aptiv and the newly formed entity entered into various agreements to facilitate an orderly transition and to provide a framework for their relationship going forward, which included a transition services agreement. The transition services primarily involve Aptiv providing certain administrative services to the joint venture for a period of up to 24 months after the closing date. These agreements are not material to Aptiv. The Company will account for its investment in the newly formed entity prospectively using the equity method of accounting.
The Company determined that the assets and liabilities associated with Aptiv’s contribution to the joint venture, which were reported within the Advanced Safety and User Experience segment, met the held for sale criteria as of December 31, 2019. Accordingly, the held for sale assets and liabilities were reclassified in the consolidated balance sheet as of December 31, 2019 to current assets held for sale and current liabilities held for sale, respectively, as the contribution of such assets and liabilities to
the joint venture was expected to occur within one year. Upon designation as held for sale, the Company ceased recording depreciation of the held for sale assets.
Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell. The estimated fair value less costs to sell of Aptiv’s contribution to the joint venture exceeded its carrying value as of December 31, 2019, and therefore no adjustment to these long-lived assets was necessary.
As a result of the completion of the transaction on March 26, 2020, there were no assets or liabilities held for sale as of March 31, 2020. The following table summarizes the carrying value of the major classes of assets and liabilities held for sale as of December 31, 2019:
December 31,
2019
(in millions)
Cash and cash equivalents$1  
Accounts receivable, net1  
Property, net64  
Operating lease right-of-use assets12  
Intangible assets, net126  
Goodwill318  
Other assets10  
Total assets held for sale$532  
Accounts payable$9  
Accrued liabilities19  
Long-term operating lease liabilities10  
Other liabilities5  
Total liabilities held for sale$43  
The pre-tax loss of Aptiv’s autonomous driving operations contributed to the joint venture on March 26, 2020, included within Aptiv’s consolidated operating results, were $41 million and $41 million for the three months ended March 31, 2020 and 2019, respectively.
Schedule of Technology Investments
As of March 31, 2020, the Company had the following technology investments, which are classified within other long-term assets in the consolidated balance sheets:
Investment Name  Segment  Investment DateInvestment
(in millions)
Krono-Safe, SASAdvanced Safety and User Experience  Q4 2019$6  
Affectiva, Inc.Advanced Safety and User Experience  Q4 201815  
Innoviz TechnologiesAdvanced Safety and User Experience  Q3 201715  
LeddarTech, Inc.Advanced Safety and User Experience  Q3 201710  
Valens Semiconductor Ltd.Signal and Power Solutions  Q2 201710  
Otonomo Technologies Ltd.Advanced Safety and User Experience  Q1 2017; Q1 201937  
Quanergy Systems, IncAdvanced Safety and User Experience  Q2 2015; Q1 20166  
Other investmentsAdvanced Safety and User Experience  Q4 2018; Q3 20192  
$101  
gabocom  
Business Acquisition [Line Items]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed The preliminary purchase price and related allocation to the acquired net assets of gabocom based on their estimated fair values is shown below (in millions):
Assets acquired and liabilities assumed
Purchase price, cash consideration, net of cash acquired$311  
Property, plant and equipment$25  
Intangible assets75  
Other liabilities, net(11) 
Identifiable net assets acquired89  
Goodwill resulting from purchase222  
Total purchase price allocation$311  
Falmat  
Business Acquisition [Line Items]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed The preliminary purchase price and related allocation to the acquired net assets of Falmat based on their estimated fair values is shown below (in millions):
Assets acquired and liabilities assumed
Purchase price, cash consideration, net of cash acquired$25  
Intangible assets$12  
Other assets, net6  
Identifiable net assets acquired18  
Goodwill resulting from purchase7  
Total purchase price allocation$25  
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Autonomous Driving Joint Venture [Member]  
Business Acquisition [Line Items]  
Schedule of Reconciliation of Major Classes of Assets and Liabilities Held for Sale, Not Discontinued Operations [Table Text Block] The following table summarizes the carrying value of the major classes of assets and liabilities held for sale as of December 31, 2019:
December 31,
2019
(in millions)
Cash and cash equivalents$1  
Accounts receivable, net1  
Property, net64  
Operating lease right-of-use assets12  
Intangible assets, net126  
Goodwill318  
Other assets10  
Total assets held for sale$532  
Accounts payable$9  
Accrued liabilities19  
Long-term operating lease liabilities10  
Other liabilities5  
Total liabilities held for sale$43