Continental: Executive Board decides to spin off the automotive division

Continental intends to spin off its automotive parts division as expected. The Executive Board has decided to separate the Automotive division from the corporation and float it separately on the stock exchange, the company announced in Hanover on Monday. Subject to the approval of the Supervisory Board, which is expected in March 2025, the spin-off could be completed by the end of 2025.

The Group had already announced in August that it was examining a possible spin-off of the Automotive division. Automotive is Continental's third division alongside Tires and Industrial Solutions. Among other things, the company develops electronics, brakes and interior fittings for car manufacturers.

Suppliers under pressure

The supplier business is cyclical and the automotive industry is currently in crisis. Continental Automotive is running a comprehensive cost-cutting program, the company is closing two locations in Germany and cutting thousands of jobs. Costs are to be reduced by 400 million euros a year from next year.

This is also intended to make the division fit for the spin-off. "Our continuous performance improvement is the important basis for positioning Automotive in a future-oriented and capital market-capable manner," explains Automotive CEO Philipp von Hirschheydt according to the press release. "We will continue to implement all necessary measures with determination."

The remaining Tire and Industrial divisions are also to become more independent. "To achieve this, it is important that we gradually transfer key tasks and functions of the Group to the divisions," says CEO Nikolai Setzer. "The aim is to create a lean, focused holding structure by the end of 2025."

Spin-off without cash flow

Of the approximately 195,000 employees at Continental, around 96,400 work in the Automotive division. This makes the Automotive division the largest in the corporation. However, Conti makes most of its profits from the tire business.

In the spin-off, Continental shareholders simply receive new shares in the Automotive division and can then decide whether to sell shares or not. The company will not receive any money.

Years ago, Conti spun off its powertrain business to the company Vitesco and also floated it on the stock exchange via a spin-off. In the meantime, the Regensburg-based company has slipped under the umbrella of automotive and industrial supplier Schaeffler.

(vbr)