The supervisory board of German car parts supplier Phoenix has approved a draft merger contract and a domination agreement that governs a takeover by Continental AG, a report said.
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Reuters said Phoenix would call an extraordinary meeting of shareholders on December 28 to vote on the accord.
Tyre car parts maker Continental has said earlier it would pay a sweetened €18.89 euros per share for around a quarter of Phoenix that it does not already own, boosting the deal’s cost by €13 million to €18 million, according to the report.
The group had offered €15 euros a share for its smaller German rival in a tender that expired at the end of July and which gave it just over three quarters of Phoenix’s voting stock. It now has a 75.73% stake.
Continental chief financial officer Alan Hippe told Reuters the higher price was justified given Phoenix’s good nine-month results, which boosted the firm’s value.
Continental reportedly plans to merge the company with its ContiTech division to create a business with annual revenues of around €2.9 billion.
Reuters noted that Continental said last month it would enter a domination agreement with Phoenix, under which it gains full operational control and entitlement to 100% of future profits, and the new offer arises from that accord, which was agreed by both companies based on an appraisal by auditors Ernst & Young.
