According to Reuters, Continental may offer more than EUR10bn ($US13.4bn) for the division, more than Siemens could raise from an IPO.
Siemens had planned an IPO and this continues to be its preferred option because it could retain a stake in the company and thus retain control. It is a highly successful business but is now considered non-core. Siemens is refocusing its business on products that address climate change and ageing populations.
Reuters reported that an IPO would also be the preferred option of labour representatives, as staying under the control of Siemens would offer the best prospects for job security and future investment.
Preparations are continuing for an IPO, but the expected offer from Continental would be too good to overlook. Siemens has also received expressions of interest from other potential buyers, including Trw and Dutch portable satellite navigator [GPS] specialist Tomtom. Private equity firm KKR is also believed to be considering making an offer as part of a consortium that also includes Permira.
Reuters reported that the final decision would be made by a handful of people and approved by the supervisory board at the end of July. The news agency noted that Siemens gets a new CEO from 1 July when Peter Loescher is due to take over from Klaus Kleinfeld.