| Continental, the world's fourth largest tyre manufacturer, is being acquired by privately owned ball bearing maker Schaeffler in a staged �12bn deal.
The two German companies agreed the deal on Wednesday, and the acquisition will create the world’s largest car components manufacturer.
The move also brings to an end an acrimonious dispute after Schaeffler began to build up a stake in Continental through a series of share swaps.
Schaeffler clinched the agreement after raising its offer from �70 to �75 a share for Continental. This represented a further �800m from its earlier offer and a 39% premium over the pre-bid share price.
The buyer has pledged a number of safeguards to Continental including supporting its ongoing strategy and respecting employment conditions.
According to press reports, it has also guaranteed the retention of Continental’s Hannover HQ. The terms are being overseen by former German chancellor Gerhard Schroeder.
In addition, Schaeffler will not increase its holding in Continental beyond 49.9% for a period of four years.
Continental left itself vulnerable to a take-over following its �11bn acquisition of automotive components giant VDO from Siemens last year which led to a near �10bn debt burden.
The combination of Schaeffler and Continental, whose turnover is three times the size of its buyer’s, will overtake Bosch as the world’s largest automotive components supplier. |
