Knorr must buy Bosch's 20pc stake in its commercial vehicle system JV

BERLIN: German brake maker Knorr Bremse must buy out Bosch's stake in their joint venture, Knorr Bremse's financial head Frank Weber said on Thursday, following an arbitration court ruling from last year not previously announced.

A purchase price for the stake in the European Commercial Vehicles Systems partnership and a joint venture in Japan has yet to be negotiated. Knorr said it has set aside 379 million euros ($456.2 million) on its balance sheet to meet those costs.

Bosch wanted to exit the joint venture following a contractual dispute that first made public in 2018, in which Knorr said Bosch accused it of competing in truck steering systems in violation of agreements between the two companies.

Auto parts supplier Bosch planned to exercise an option to sell its 20% stake to Knorr. Munich-based Knorr denied that it had the right to do so, but the 2020 arbitration proceeding found in Bosch's favour.

Bosch sold its truck brake business to Knorr Bremse more than 20 years ago for a stake in Knorr's Commercial Vehicle Systems.

A second arbitration proceeding on the supply relationship between the two companies is pending, Weber said.

Earlier on Thursday, Knorr reported a 16.7% drop in last year's earnings before interest, taxes, depreciation and amortization (EBITDA), and said it expected a shortage in semiconductors to persist into the second half of 2021.

Knorr expects sales of between 6.5 billion and 6.9 billion euros this year, above last year's level, assuming no further restrictions due to the coronavirus pandemic.

"We expect to be able to compensate for any sales losses due to current supply bottlenecks of electronic components in the semiconductor industry in the course of 2021," the company said.

The company, which lost its former chairman Heinz Hermann Thiele last month, does not expect instability in its ownership structure after Thiele's death, Chief Executive Jan Mrosik said on Thursday.