Citing an “increasingly dynamic” automotive-industry markets, Continental AG is evaluating a spin-off of its auto parts business as a separate public company. The group will make a final decision on the plan before the end of this year, and the anticipated spin-off would take place before the end of 2025, pending board members’ approval of the plan.
“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,” stated Continental CEO Nikolai Setzer.
Well known for producing automotive tires, the conglomerate headquartered in Hanover, Germany, also manufactures brake systems, vehicle electronics, automotive safety systems, powertrain systems, and chassis components, tachographs, and other parts supplied for automotive and transportation system production.
As currently configured the Automotive group has “has a high level of technological and system expertise as well as vertical integration,” Continental reported, with “a strong market position for innovative brake and comfort systems, sensor solutions and displays, and has also made great strides in developing software, architecture platforms and assistance systems for the rapidly growing future market of software-defined and autonomous vehicles.”
The group had sales of around €20.3 billion in FY2023 (about $22.2 billion), and has around 100,000 employees.
“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,” stated Continental supervisory board chairman Prof. Wolfgang Reitzle.
