HERZOGENAURACH, Germany—Schaeffler A.G. has sold nearly 8 percent of its shareholding in Continental A.G., generating about $1.27 billion in cash it intends to use to reduce debt.
The move reduces Schaeffler's ownership of Continental to 46 percent from 49.9 percent, but the company stressed the move does not lessen its interest in Conti as a strategic shareholding.
Maria-Elisabeth Schaeffler and Georg F. W. Schaeffler, shareholders of Schaeffler Group, called the move “an important step for the continuous successful development of our company,” and that the group will continue to maintain its shareholding in Continental for its long-term and strategic importance.
Herzogenaurach-based Schaeffler, a global automotive and industrial supplier, said it sold 7.8 million Conti shares at $163.33 per share to a "broad range of international investors" in an accelerated bookbuilt offering. Schaeffler used the proceeds of the sale to reduce its gross debt by about 12.6 percent to $12 billion.
Following the placement, Schaeffler A.G. holds 34.2 percent and Schaeffler Holding holds 11.8 percent of Continental's outstanding share capital and, as such, remains Conti's largest shareholder.
Schaeffler first started investing in Continental in July 2008 in a bid to effect a merger or enhanced cooperation with the Hanover, Germany-based tire, rubber and auto components supplier.
After initially fighting the offer, Conti acquiesced in August 2008 to a compromise shareholding arrangement.