German Continental is so badly hit by poor economics that it is separating its Automotive division. This will happen by the end of 2025 at the latest.
The crisis-stricken tire and car parts manufacturer Continental has decided to sell its Automotive division. The sale is expected to be completed before the end of 2025.
This is reported by several German media outlets – including NDR .
Continental has had a deficit in recent years in its Automotive division, which supplies electronics, brakes and interiors to car manufacturers, among other things.
To counter this and reverse the trend, the group has launched a savings program that will reduce annual costs by DKK 2.96 billion starting next year. This includes cuts to 5,400 administrative positions and 7,150 positions within research and development.
– With an ongoing savings program, annual costs should be reduced by 400 million euros from next year, says Continental management.
Although the decision to divest has been made, it still needs approval from both the board of directors and the shareholders. The latter must first give their approval at an extraordinary general meeting. The board of directors will meet in March and the general meeting in April next year.
The plan is to list the Automotive division in a so-called spin-off.
– According to Continental, the Automotive division will be sold on the stock exchange in a so-called spin-off. Shareholders will thus receive new shares in the part to be separated in their custody account.
"They will then have to decide whether they want to stay or sell their shares. This means that no money will flow into the group," explains Continental.
Continental, the largest part of the DAX group, employs around 200,000 people, almost half of whom work in the Automotive division. Continental has no plans to sell its tire business, which accounts for the largest part of the group's profits.
Continental is not the only German giant that needs to find new legs to stand on. Gearbox manufacturer ZF owes so many billions of kroner that there are doubts about whether the company will even survive. Read more about it here .
