Continental evaluating spin-off of ‘automotive’ business

Hanover, Germany – Continental AG has announced plans to conduct a detailed evaluation on spinning off its ‘automotive group sector’ in view of "increasingly dynamic markets."

With the move, the group will be divided into two independent companies to “fully harness” Continental’s value and group potential, said the German group 5 Aug.

Following the detailed evaluation, the executive board will make a decision, by the year-end, on the spin-off, the preparation for which is “already under way.” 

Subject to the approval of the board and stakeholders, the spin-off is expected to be completed by the end of 2025.

As part of the setup, the “profitable” Tires and ContiTech group sectors would remain under the umbrella of Continental.

“This structure will also be part of the detailed evaluation,” said Continental without providing further details.

Elaborating on the decision, Continental said it is “systematically analysing” its activities in order to increase value creation.

The German group noted that markets and customers, especially in the automotive industry, had 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,” said CEO Nikolai Setzer.

Against this backdrop, Setzer added, “we are aiming to divide Continental into two independent companies.”

The spin-off has the potential to create "competitive opportunities, enhance agility and increase transparency,” explained chairman of supervisory board, Prof Wolfgang Reitzle.

The stand-alone automotive business, Reitzle said, will enable investors to invest in a company focused specifically on automotive electronics.

Continental's automotive group sector has already had its activities consolidated in a single legal entity since 2022.

The business generated sales of €20.3 billion and earnings of €982 million last year and currently employs around 100,000 people.