The required steps for implementing a spin-off are already being prepared, according to Continental. The company has been struggling for several years with low profitability in its automotive supplier business, which includes products ranging from brakes to sensors and assistance systems.
In 2023, the automotive division reported sales of 20.3 billion euros (USD 22.31 billion) and employed about 100,000 people. ContiTech, which will remain as the tyre and plastics business, reported similar sales of 20.8 billion euros and a comparable number of employees. A spin-off would result in the automotive part of ContiTech being carved out, with previously announced plans to carve out the User Experience division within automotive put on hold.
Wolfgang Reitzle, chairman of the supervisory board, expressed his support for the plans.
"As a strong, independent entity, Automotive would be able to harness its full potential for creating value," he said in a statement.
"In addition, investors would be able to invest in a company focused specifically on automotive electronics," Reitzle added.
Shareholders would receive shares in the new company in proportion to their Continental holding, similar to the spin-off of Vitesco Technologies in 2021. Philipp von Hirschheydt, current head of the division, would lead the spun-off company, Setzer told analysts and investors on the call. The contract manufacturing division would also be part of the transaction, according to Continental.
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