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Tyre manufacturer Continental might spin off automotive-electronics division
Industry News- Aug 09,24
The potential move is aimed at enhancing flexibility and allowing the company to adapt more effectively to dynamic market conditions and the evolving software-driven technology landscape.
German tyre manufacturer Continental is considering spinning off its loss-making automotive-electronics division, which employs 100,000 people. The potential move is aimed at enhancing flexibility and allowing the company to adapt more effectively to dynamic market conditions and the evolving software-driven technology landscape.
Nikolai Setzer, CEO, Continental noted that the rapidly changing automotive industry and fluctuating regional markets necessitate greater agility. Spinning off the electronics unit could create new competitive opportunities and enable focused investment in automotive electronics.
Following the announcement, Continental’s shares improved from a 4% decline to a 2% drop. The company plans to make a final decision by the fourth quarter, with a potential shareholder vote next year. If the spin-off proceeds, it will be listed on the Frankfurt Stock Exchange, where Continental is currently listed.
The automotive-electronics division is recognised for its market position in brake and comfort systems, sensor solutions, and displays, while also working on software and platforms for autonomous vehicles. The remaining business, focused on tyres and industrial solutions, will also employ about 100,000 people.
(Market Watch)
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