HANOVER, Germany (July 16, 2008) -– Continental A.G.'s executive board has rejected a takeover offer by Schaeffler Group, which has acquired more than 30 percent of Conti's stock.
The Conti board said the offer of 69.36 euros—the equivalent of $110.20 cents at the current exchange rate—is “highly opportunistic, does not come close to the true value of Continental, does not create trust and lacks a convincing strategic rationale.” The bid is worth $11.2 billion.
Schaeffler is a family-owned business and makes bearings and other components for automotive, aerospace and industrial markets. The firm employs 66,000 and reported sales of more than $14 billion in 2007.
The company said it wants to acquire a strategic position of more than 30 percent ownership in Conti, but not necessarily majority control. Schaeffler said it wouldn't break up Conti, and it would remain an independent company based in Hanover, with no jobs lost because of the sale.
Conti said its talks with Schaeffler make it doubtful that company only wants a minority position and wouldn't change Conti's structure. The board said it would approve a 20-percent investment by Schaeffler, but not a controlling interest of more than 30 percent.