HERZOGENAURACH, Germany (Jan. 9, 2009) — German vehicle parts maker Schaeffler Group has completed its $15 billion-plus acquisition of 49.9-percent control of Continental A.G., clearing the way for “integrating the companies quickly and in a pragmatic manner.”
Herzogenaurach-based Schaeffler concluded the months-old deal this week by paying the depositary banks of those shareholders who had tendered their shares under Schaeffler's 75 euro per share offer. Schaeffler also transferred shares that exceeded the 49.9-percent threshold to other financial institutions.
Shareholders representing about 82 percent of Conti's stock tendered more of their shares than anticipated, forcing Schaeffler to negotiate with financial institutions to agree to take over those shares above the agreed 49.9-percent threshold.
“The conclusion of the takeover clears the way for integrating the companies quickly and in a pragmatic manner,” said Juergen Geissinger, Schaeffler Group president and CEO in a prepared statement. “Against the backdrop of the financial crisis and the market changes in the automotive industry, both companies are facing great challenges and have no time to lose. Constructive cooperation and concentration on factual issues and business matters is all important now.
“…By quickly bringing together the strengths of both companies and exploiting our big opportunities and synergies without delay, we are taking the right steps in response to the worldwide consolidation of the automotive supplier industry and we will therefore be able to emerge from the crisis together with renewed strength,” Mr. Geissinger said.
The combination of the two vehicle supply firms will bring together Schaeffler's strengths in mechanical, mechatronic and precision components for engines, transmissions and chassis and Continental's strengths in electronics and software systems for engines, chassis and vehicle interiors.
The European Commission cleared the deal on Dec. 19.
In addition to agreeing to keep its shareholding in Conti to below 50 percent until at least August 2012, Schaeffler agreed to support the ongoing strategy and business policies of Conti's executive board while maintaining its market and brand appearances, according to Conti.
Schaeffler also agreed to compensate Conti up to a maximum of $715 million for possible damages resulting from a change of control in connection with existing Conti financing agreements as well as for negative tax effects resulting from Schaeffler´s shareholding, Conti said.