Continental AG is assessing a strategic plan to separate its Automotive group sector into an independent entity, following a thorough review by its Executive Board. This initiative aims to fully realize the potential of Continental’s varied business segments amidst rapidly changing automotive markets.
Evaluation and Timeline
The Executive Board will reach a final decision on the spin-off by Q4 2024. Pending approval from both the Executive and Supervisory Boards, the proposal will be presented at the Annual Shareholders’ Meeting on April 25, 2025. With shareholder consent, the spin-off is projected for completion by the end of 2025. Preparations are currently advancing, focusing on retaining the profitable Tires and ContiTech sectors under Continental’s umbrella.
Leadership Perspectives
“Our strategy aims to increase our value creation. This involves systematically analyzing how we can best position our group sectors for success. Markets and customers, especially in the automotive industry, have evolved extremely dynamically in recent months,” stated Continental CEO Nikolai Setzer.
“Looking ahead, sharply fluctuating regional developments in the markets as well as the software-driven technology transformation will require even greater flexibility and entrepreneurial freedom. Against this backdrop, we are aiming to divide Continental into two independent companies,” added Setzer.
Prof. Wolfgang Reitzle, Chairman of the Continental Supervisory Board, underscored the benefits: “A spin-off of Automotive has the potential to create competitive opportunities, enhance agility and increase transparency. As a strong, independent entity, Automotive would be able to harness its full potential for creating value. In addition, investors would be able to invest in a company focused specifically on automotive electronics.”
Employee Considerations
Setzer emphasized employee interests during this transition: “We will have the interests of all employees firmly in mind when conducting the detailed evaluation – they too would benefit from having two strong, independent companies.”
Automotive’s Market Focus
The Automotive sector, generating €20.3 billion in sales last year and employing approximately 100,000 people, stands poised to capitalize on the burgeoning market for software-defined and autonomous vehicles. With expertise in innovative brake and comfort systems, sensor solutions, and displays, the sector has also made significant advances in software, architecture platforms, and assistance systems.
Tires and ContiTech’s Resilience
The Tires and ContiTech sectors, employing around 100,000 people and generating €20.8 billion in combined sales last year, excel in globally successful tire business and innovative material solutions with an industrial focus. Their regional diversification and differentiated distribution channels provide robust resilience against economic volatility.
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