Continental May Be Under Pressure to Sell Tyres Group
By Denna Bowman
Continental AG is facing pressure to sell its tyres business in the ongoing bitter power struggle with its main shareholder, according to news reports.
Schaeffler, which acquired a main shareholding stake in the hostile takeover, has renewed calls for divestment of the German car parts makers tyres group to ease debt pressures, sources told Reuters news agency.
The issue was revived during Thursday’s supervisory board meeting, sources told Reuters.
“Schaeffler said … the rubber tyre business would not count as a core business and that selling it was an option,” a supervisory board member told Reuters on Friday.
However, other board members said that, given the tough market environment, a quick sale could not be expected.
The German ball-bearings maker, launched its hostile $18 billion takeover bid last July, and currently owns just under 50 percent of Continental AG. However, the bid played out with Schaeffler collecting more Continental shares than it could afford, lumbering it with billions of euros of debt.
In another boardroom battle, Schaeffler are bidding to oust Chief Executive Karl-Thomas Neumann and replace him with its head of automotive, Elmar Degenhart.
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