ZF will continue to be headquartered in Friedrichshafen. TRW will be a separate division (Photo: ZF)

Germany's ZF Friedrichshafen is taking over TRW Automotive to form a new global supplier group that, with combined annual revenue of around 30 billion euros and 138,000 employees, will be among the world's 10 biggest automotive suppliers.

The two companies have complementary strengths, with ZF occupying a leading position in driveline and chassis technologies and TRW specializing in active and passive safety systems and components.

“The transaction combines two highly successful companies that have remarkable track records of innovation and growth and solid financial positions," ZF CEO Stefan Sommer said in a press release.

ZF had to divest its half-share of a 4.1 billion-euro-a-year steering joint venture  - ZF Lenksysteme (ZFLS) - to get around potential anti-trust objections. Its partner, Robert Bosch, is acquiring the stake, which will give it full control of a company that could play a key role in autonomous driving.

"With its complete takeover of ZFLS, Bosch is strengthening its ability to actively shape the future of mobility," Bosch CEO Volkmar Denner said in a press statement."The company is a technological leader in the growth area of electric power steering, and precisely this is the core technology for automated driving, for more efficient vehicles, and also for electric cars.”

The new ZF Group will more than double its sales in two key growth markets, China and the US. It will also have a better geographical balance in its sales. Half of all revenue will henceforth come from Europe, while the other half will be generated in North America, Asia-Pacific and the rest of the world.

Once the transaction closes, which is expected to happen in the first half of 2015, ZF will remain headquartered in Friedrichshafen, while  TRW will be integrated into ZF as a separate business division. No decisions about management responsibilities for the TRW business have been made yet, ZF said.

ZF, like Bosch, is owned by a foundation, In ZF's case, the majority owner, the Zeppelin foundation, is run by the city of Friedrichshafen in southwestern Germany.