Continental may split into two companies
The company Continental announced that it is conducting an additional assessment of the conversion of the Automotive division (which produces various automotive components, such as braking systems, various types of sensors, displays, etc.) into a separate structure, and "the goal of creating two independent companies is to fully realize the potential of Continental".
The final decision on the creation of a new company will be made in the fourth quarter of 2024, and if approved by the Supervisory Board and the Board of Directors, the issue will be put to a vote at the annual general meeting of shareholders, which will take place on April 25, 2025. It is noted that preparations for the creation of a separate company are already underway, and ContiTech (which manufactures, for example, timing belts) and the tire business will remain part of Continental.
As noted by Continental CEO Nikolai Setzer, the implementation of the company's strategy includes a systematic analysis of how to ensure the success of all its divisions. "In various industries, especially in the automotive industry, dynamic changes have been taking place in recent months, and if we talk about the future, then sharp changes in regional markets and digital transformation of the industry will create a need for even greater flexibility and entrepreneurial freedom," he said. - That's why we intend to divide Continental into two independent companies.
Continental Supervisory Board Chairman Wolfgang Reitzle added that the conversion of the Automotive division into a separate structure "creates opportunities for enhancing competitive advantages while improving flexibility and transparency in operations". "As a strong independent organization, Automotive will be able to use its full potential, and in addition, investors will have the opportunity to invest directly in a company specializing in automotive electronics," he noted.
As in the case of the spin-off of Vitesco Technologies in 2021, shareholders will receive securities of the new company in proportion to their stake in Continental.
"During the detailed evaluation, we will take into account the interests of all employees, for whom it is also beneficial that we will have two strong independent companies," Setzer emphasized.
Continental Automotive generated revenue of €20.3 billion last year, and the division has a workforce of around 100,000 people. The tire division of Continental and ContiTech employ approximately the same number of employees, with sales of €10.4 billion and €6.8 billion in 2023, respectively.