Brembo eyes startup deals as software takes bigger role in brakes

FILE PHOTO: The logo of Brembo is seen at its headquarters in Bergamo, Italy October 7, 2019. REUTERS/Flavio Lo Scalzo

MILAN (Reuters) - Brembo could look at buying tech startups to boost the software content of its premium brakes, Chief Executive Daniele Schillaci said, as the Italian company unveiled its latest braking system.

The company, whose customers include Ferrari, Tesla, and several Formula One teams, presented 'Sensify', a pioneering braking system that can operate independently on each of a vehicle's four wheels.

It includes a digital "brain" that uses data to adapt braking to personal driving styles and changing road conditions.

Schillaci, an automotive industry veteran with previous stints at Nissan Motor and Toyota, said mechanics were still predominant in the Sensify system, compared with software content.

"But soon the mechanic and software contents will soon be equivalent and by the end of the decade software will become predominant in braking systems," he said.

"That's why we include tech companies among our eventual M&A targets, not necessarily large companies but also startups which could be interesting for us," Schillaci said.

Brembo in the last year agreed to buy SBS Friction, a Danish maker of brake pads for motorbikes, and Spanish motorcycle brake maker J.Juan.

Schillaci said Brembo was not looking at acquisitions just to increase revenues.

"We look at M&A as a way to make our core business thrive. Recent deals show we want to be vertically integrated in what we do," he said.

By the end of this year, the company will open its first high technology lab in California's Silicon Valley to accelerate its digitisation strategy.

"We'll be in California to acquire know-how on latest artificial-intelligence technologies, but also to look around, if we see there are startups catching our attention," Schillaci said.

Brembo shareholders have approved a loyalty share scheme that would allow its controlling family to retain that position as the company looks to make acquisitions.

Schillaci said Brembo was in talks with a major unidentified automaker to supply Sensify to its models starting from 2024, while adding he expected the system would become a "standard feature," at least for premium platforms, by 2030.

All components of the Sensify system are designed internally, Schillaci said, adding Brembo was finalising partnerships with external providers "to complete our know-how and to accelerate production scale-up when needed".

(Reporting by Giulio Piovaccari; Editing by Mark Potter)

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