Continental’s board has decided, following a strategic review, to conduct a further detailed evaluation on spinning off the company’s Automotive group sector.
It says the aim of having two independent companies is to ‘fully harness Continental’s value and growth potential’. Following its detailed evaluation, the Executive Board will make a decision on the spin-off in the fourth quarter of 2024.
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A spin-off and listing of Automotive would then be put to a vote by the Annual Shareholders’ Meeting of Continental AG on April 25, 2025. If approved, the plan is to complete the spin-off by the end of 2025. The preparations for a spin-off are already underway, the company said.
As part of the potential future set-up, the profitable Tires and ContiTech group sectors would remain under the umbrella of Continental. This structure will also be part of the detailed evaluation.
Nikolai Setzer, Continental CEO, said: “Our strategy aims to increase our value creation. This involves systematically analyzing how we can best position our group sectors for success. Markets and customers, especially in the automotive industry, have evolved extremely dynamically in recent months. Looking ahead, sharply fluctuating regional developments in the markets as well as the software-driven technology transformation will require even greater flexibility and entrepreneurial freedom. Against this backdrop, we are aiming to divide Continental into two independent companies.”
“A spin-off of Automotive has the potential to create competitive opportunities, enhance agility and increase transparency. As a strong, independent entity, Automotive would be able to harness its full potential for creating value. In addition, investors would be able to invest in a company focused specifically on automotive electronics,” said Prof. Wolfgang Reitzle, chairman of the Continental Supervisory Board.
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By GlobalDataAs with the spin-off of Vitesco Technologies in September 2021, Continental shareholders would receive shares in an independently listed Automotive entity in proportion to their Continental holding.
The Automotive group sector – which has already had its activities consolidated in a single legal entity since 2022 – would become a fully independent company as a result of the planned spin-off. Conti’s Automotive group generated sales of around €20.3 billion in the past fiscal year and currently employs around 100,000 people.
The group sector has a high level of technological and system expertise as well as vertical integration. The company said it has carved out a strong market position for innovative brake and comfort systems, sensor solutions and displays, and has also made great strides in developing software, architecture platforms and assistance systems for the rapidly growing future market of software-defined and autonomous vehicles.
The Tires and ContiTech group sectors currently employ around 100,000 people and generated combined sales of around €20.8 billion in the past fiscal year (Tires: €14.0 billion; ContiTech: €6.8 billion). Conti says Regional diversification, as well as differentiated distribution channels and sales markets, ensure a high level of resilience against economic volatility.
