Component supplier Continental has expressed interest in acquiring a stake in Siemens VDO Automotive.
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The interest follows a surprise statement by Siemens that it would float more than 25% of the shares in its automotive component subsidiary on the stock exchange, but that it would remain the majority shareholder. The announcement was made ahead of the Siemens annual shareholders meeting today.
Siemens said an initial public offering (IPO) of Siemens VDO would bring the company more flexibility. In a statement it said: “This move would give SV the necessary financial resources and greater entrepreneurial flexibility for ensuring further sustainable and profitable growth.”
A Continental spokesperson told dpa-AFX news agency yesterday that the company is “available for talks” and that Siemens must decide whether it is interested into entering into a discussion with one of Siemens VDO’s main competitors.
The Continental spokesperson reportedly said that the product portfolios harmonise well.
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By GlobalDataWith sales of EUR10bn in the past fiscal year, Siemens VDO is one of the largest and most successful Siemens groups. Since being established more than 20 years ago, the automotive group has rapidly grown an average of 10% a year through organic growth and acquisitions. Siemens VDO met its margin target set as part of Operation 2003 and has continued to improve its profitability in a challenging competitive environment. “An IPO would give SV greater flexibility, further reinforce its strong position in the market for automotive electronics, and actively tap the market consolidation opportunities for its growth,” said the spokesperson.
The expansion of the successful and profitable, yet capital-intensive business of Siemens VDO has long been the subject of intensive discussion at Siemens. “We are convinced that a listing of Siemens VDO would be a highly attractive option for continuing to drive the further expansion of Siemens VDO. This would write a new chapter in the Siemens VDO success story and open up enormous future opportunities for the company and its employees,” said the spokesman. Preparations for the IPO will be initiated immediately. Further details have not yet been finalised.
Siemens VDO Automotive reported a slight downturn in profits, turnover and order intakes between October and December, according to dpa-AFX.
