(Bloomberg) -- ZF Friedrichshafen AG, an auto parts supplier to the likes of BMW AG, has hired Citigroup Inc. to advise on the possible sale of its passive safety systems division, people familiar with the matter said.

The privately-held engineering group selected the US bank to explore strategic options including a full or partial sale, as well as a listing in 2024, according to the people. The business may be worth more than €3 billion ($3.2 billion), they said, asking not to be identified discussing confidential information. 

ZF last year announced plans to carve out the passive safety unit by the end of 2023 to open up new strategic options, as part of a review of its portfolio. A separation would create “the best conditions to generate stronger growth and a sustainable expansion of the market position of the world’s number 2 in the passive safety technology business by involving external investors,” it said.

No final decision on outcome, timing or valuation has been made, the people said. A representative for ZF declined to comment on the mandate, referring to the company’s previous statements on a carve-out. A spokesperson for Citigroup didn’t immediately provide comment.

The division generated €3.8 billion in revenue in 2021 and had a market share of around 25% of global sales of passive safety equipment, ZF said in October. Its products are used in everything from small to sophisticated luxury vehicles. 

ZF takes its name from its headquarters in Friedrichshafen, the southern German town on Lake Constance, and can trace its roots back to airship pioneer Ferdinand von Zeppelin. It’s under pressure to adapt its business for the age of electric and self-driving cars, which may eventually render traditional combustion engine vehicles and their parts makers obsolete. 

No stranger to dealmaking, ZF became one of the world’s largest auto-parts makers after agreeing to buy TRW Automotive for $12.9 billion in 2015. Five years later, it completed its $7 billion acquisition of Wabco Holdings Inc. to add commercial-vehicle technology.

--With assistance from Siddharth Philip, Dinesh Nair and Eyk Henning.

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