HANOVER, Germany—Continental A.G.'s supervisory board unanimously approved the planned spin-off of the Automotive Group sector and recommended that the 2025 shareholders meeting—taking place April 25 in Hanover—also approve this step.
"Today, the Supervisory Board unanimously gave the green light for the spin-off of Automotive," Board Chairman Wolfgang Reitzle said in a statement March 12. "This is an important step in Continental's realignment. Focused companies are significantly more agile and can create more value, especially in a challenging environment."
Conti's executive board previously approved the plans to spin off the unit late last year. The spin-off is expected to be complete by the end of 2025.
Subject to approval, the future independent company is to have cash funds of €1.5 billion (about $1.6 billion) by the time of the spin-off, Continental said. The business also is to be strengthened by a revolving credit facility of €2.5 billion ($2.7 billion).
Continental expects to list the carved out automotive company on the Frankfurt Stock Exchange in September.
The allocation ratio is expected to be 2:1, meaning that each Continental shareholder will receive one share in the then listed automotive company for every two Continental shares held.
"As part of this realignment, we are strengthening the independence of all our group sectors: Automotive, Tires and ContiTech," Continental CEO Nikolai Setzer said in a statement. "This will enable them to be even more agile and closer to customers and markets so they can achieve their full growth and value potential."
Stefan Buchner, member of Continental's supervisory board, is to chair the supervisory board of the planned independent company. Philipp von Hirschheydt will continue as CEO of the company after the spin-off.
Short and mid-term targets of the spin-off at its Capital Market Day on June 24, and for Continental (Tires and ContiTech) on June 25. Both events will take place in Frankfurt am Main, Germany
European Rubber Journal contributed to this report.
