Daily Management Review

Continental considers spinning off unprofitable automotive electronics division


08/06/2024


Continental AG, a German tire and automotive parts manufacturer, announced the possibility of separating its automotive electronics division into a standalone company.



ArtBrom
ArtBrom
Following a thorough assessment of the company's operations, the management has chosen to carry out a more detailed examination to explore the potential of segregating the automotive electronics segment. Two separate firms will enable Continental to maximize its growth opportunities.

A definitive conclusion will be reached in the last quarter of 2024. If given the green light, the business split and listing will be presented for an annual shareholder vote on April 25, 2025. The spin-off is anticipated to finish by the end of next year and the new company will be publicly traded on the Frankfurt Stock Exchange, like Continental.

The automotive sector brought in revenues totaling approximately 20.3 billion euros by the end of 2023, yet remains unprofitable. It has a workforce of approximately 100,000 individuals.

In 2023, the company's two successful departments - Tires, focusing on tire manufacturing, and ContiTech, specializing in drive belt production - generated revenues of 14 billion euros and 6.8 billion euros, respectively. Around 100,000 individuals are also employed by them.

source: bloomberg.com