Schaeffler and its subsidiary Continental are reportedly holding off on merging their automotive supply divisions for now.
German business daily Handelsblatt cited ‘informed sources’ as saying that a combined automotive supply division may be considered in a few years, when the economy has recovered.
The newspaper said that originally the automotive supply operations of the two company’s were to be brought together as quickly as possible and were to be the new corporation’s flagship business.
The merger of the two divisions, however, would require complex legal and tax issues to be cleared, which will be an additional burden in the already difficult situation, sector sources said.
Last year Schaeffler borrowed EUR16bn to get control of Continental. Since then the recession has squeezed Schaeffler’s earnings and its ability to service its debt, prompting the firm to appeal for state aid from the German government.
Schaeffler has said it needs about EUR6bn in capital, and to raise the amount it has said it is prepared to sell a stake to outside investors while also asking the government for temporary financial support.