The SKF's board has decided to initiate a separation of the automotive business with the objective of a separate listing on Nasdaq Stockholm through a Lex Asea distribution to shareholders.

The intention is to list on Nasdaq during the first half of 2026.

"Given different business dynamics, end markets and success drivers for the industrial and automotive business segments, a separation will facilitate a clearer focus on distinct opportunities to enhance customer value, accelerate growth as well as improve efficiency and competitiveness," the supplier said in a statement.

"Both businesses are global leaders in their respective fields and will through a clearer focus increase customer value and leverage on their strategies as standalone companies," said chair Hans Straberg.

"The board and management therefore believe that long-term value can be created by splitting the group into two separate companies, benefiting customers, employees and shareholders."

A separation would increase automotive's ability to adapt faster to transforming global automotive markets by allowing it to make independent business decisions and investments, SKF added.

A more tailored, leaner automotive business model would further strengthen its competitive advantage and capture additional profitable growth opportunities, while at the same time accelerating its profitability transformation.

"When we launched our new business strategy in February 2022, we articulated a desire to create a more autonomous automotive business to provide strategic flexibility. I also said that we need to take bold decisions to unlock additional long-term profitable growth opportunities. Initiating a separation of the automotive business is one of those decisions," said president and CEO Rickard Gustafson.

Full year 2023 net sales for the automotive segment amounted to SEK30bn with an adjusted operating margin of 5.6%. The corresponding figures for the industrial segment were SEK73bn and 15.4%, respectively.

The board intends to present a proposal for the distribution and listing of the automotive business at a shareholders meeting in 2026. If approved, AB SKF shareholders will receive shares in the automotive business in proportion to their existing shareholding in AB SKF. The intention is then to list the automotive business on Nasdaq Stockholm during the first half of 2026.

The distribution of the automotive business is expected to meet the requirements of Lex Asea, meaning that the receipt of the shares distributed should be exempt from Swedish tax.