Continental is expected to offer over EUR10bn to acquire Siemens automotive component division, Siemens VDO.
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According to the dpa-AFX news agency, which quotes sources close to the negotiations, “the final figure is likely to between EUR10bn and EUR11bn, but closer to EUR10bn than EUR11bn.”
The offer would be subject to due diligence as Siemens has not yet allowed Continental access to its books.
Siemens is continuing to float VDO on the stock exchange, however Siemens’ new supervisory board chairman, Gerhard Cromme, is quoted in the German press this weekend as saying that if someone came along with a good over to buy the division, it would be considered seriously.
Germany’s Manager magazine wrote earlier this month that Siemens has received several high value offers for VDO. It said at least two industrial companies and several financial investors are interested in acquiring the division. The other industrial concern is likely to be TRW. Financial investors that have expressed an interest include KKR and Permira.
Analysts have estimated that VDO would raise EUR7-8m from a stock flotation.
Siemens needs the money. It is currently embroiled in a bribery scandal involving its communications division and could face a hefty fine from the US stock exchange authority, the SEC. Media reports now suggest that the corruption could have netted Siemens EUR200m, up from EUR20m when the scandal was first uncovered in November last year. The investigation is on-going so the figure could rise further.
