Auto Parts Group Schaeffer Bids for Rival Continental

Schaeffler says Continental would operate as a stand-alone company and no jobs would be lost.

The German auto and aerospace parts company Schaeffler Group launched on July 15 an offer for its much larger German rival Continental but said it was not necessarily seeking a majority stake. Schaeffler offered 69.37 euros (US$102) per share, a statement said, "or -- if higher -- the minimum offer price as determined by the Federal Supervisory Authority for Financial Services."

Schaeffler "is seeking to acquire a strategic shareholding of more than 30% in Continental but not necessarily a majority stake," it said. It currently owned 2.97% of the shares in Continental, the world's fifth largest auto parts group, and had already secured access to a significant amount of additional shares.

Schaeffler, a family-owned group, said it would support Continental's business strategy and that Continental would continue to operate as a stand-alone, listed company. "No jobs would be lost in conjunction with the transaction," it said, adding that financing "for the purchase of all shares has been secured in the full amount."

The two groups were "ideal complements to one another" because Schaeffler was strong in powertrain components while Continental focused on electronic and software systems for engines, chassis and interiors, it said.

Last year, Schaeffler posted sales of 8.9 billion euros, almost three times less than Continental's 2008 target of 26.4 billion.

Under German regulations, any company acquiring 30% in another must launch a general offer for all the outstanding shares, allowing other shareholders the opportunity to cash out if they so wish.

Copyright Agence France-Presse, 2008

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