Continental’s supervisory board has said it would decide by the end of next month on how best to operate under its biggest shareholder, Schaeffler Group, including whether to combine the two businesses.
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The supervisory board has asked managers to examine all aspects of a combination, particularly the financial feasibility. Continental said in May it might merge operations with dominant investor Schaeffler, which now has a 49% stake in the tyremaker as the two companies to reduce a combined debt of EUR22 bn ($30.5 bn).
Supervisory board chairman Rolf Koerfer said that the industrial logic of a combined business was obvious with the opportunity to create the second-largest car parts maker in the world.
In April Continental CEO Karl-Thomas Neumann said that he planned to submit a new strategy that addresses cooperation with Schaeffler by 1 August. Options could include a share sale and asset disposals, he said at the time.
Privately-held bearings maker Schaeffler currently has a further 40% of Continental parked at banks.
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