Blog: Dave LeggettContinental and VW similarities

Dave Leggett | 21 July 2008

The style of the takeover bid for Conti by family-owned German bearings maker Schaeffller is a little bit reminiscent of the manner in which Porsche has got control of Volkswagen; it's a gradual affair in which a smaller company gets control of a much bigger one by taking advantage of a low share price. And it looks likely to succeed.

Is it a good or bad thing? Continental does much more than tyres. It sounds like Schaeffler is motivated chiefly by the electronics stuff that Conti does post-Siemens VDO acquisition. Maybe going private could be to Conti's advantage? But might Schaeffler be tempted to sell off the tyres division? Or would new owners want to add shareholder value in the long run? If the prospective new owners are following Porsche-VW they will see that the architect of that, Ferdinand Piech, is taking a long view, strategically - while also doing a good job of delivering value to shareholders, on both sides. 


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