Continental Plans Potential Automotive Spin-off

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Continental’s Executive Board is considering spinning off its Automotive group sector to unlock full value potential. A final decision will be made in Q4 2024, with the spin-off potentially completed by the end of 2025.

Key Highlights:

• Executive Board to evaluate Automotive spin-off
• Final decision expected in Q4 2024
• Potential spin-off completion by end of 2025
• Aim to create two independent companies
• Profitable Tires and ContiTech sectors to remain under Continental

The profitable Tires and ContiTech sectors would remain under Continental’s umbrella. This structure will be part of the detailed evaluation. The Supervisory Board was informed of the decision today.

“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. 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,” said Continental CEO Nikolai Setzer in Hanover on Monday.

“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,” said Prof. Wolfgang Reitzle, chairman of the Continental Supervisory Board.

“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,” added Setzer.

As with the spin-off of Vitesco Technologies in September 2021, Continental shareholders would receive shares in an independently listed Automotive entity in proportion to their Continental holding.

Automotive’s Future Focus

The Automotive group sector, which consolidated its activities into a single legal entity in 2022, would become a fully independent company. Automotive generated sales of around €20.3 billion last year and employs approximately 100,000 people. The sector boasts technological and system expertise, strong market positions in innovative brake and comfort systems, sensor solutions, and displays, and advancements in software, architecture platforms, and assistance systems for software-defined and autonomous vehicles.

Tires and ContiTech’s Resilience

The Tires and ContiTech group sectors, employing around 100,000 people, generated combined sales of around €20.8 billion last year (Tires: €14.0 billion; ContiTech: €6.8 billion). They represent globally successful tires and innovative material solutions with a clear industrial focus. Their regional diversification and differentiated distribution channels ensure resilience against economic volatility.