Conti Board Refuses to Sell Rubber Business

Continental AG stood up to its major shareholder and takeover suitor, Schaeffler Group, on Wednesday (10 December) by refusing to sell the group’s tyre and rubber products business. Sources told the Financial Times that Conti’s supervisory board unanimously decided not to sell the company’s “rubber” unit, apparently rebuffing Schaeffer’s demands. Instead Conti’s board announced plans for a three-digit million euro cost cutting programme and said it is considering axing its dividend payment. FT’s source was also reportedly keen to stress that Continental should be in the driving seat of any industrial cooperation between the two companies: “We want to make it clear that, if David and Goliath go together, Goliath has to be in the drivers seat.”

Schaeffler Group’s 12.1 billion euro hostile takeover bid, launched earlier this year, cooled down slightly when former CEO Manfred stepped down and Dr Karl-Thomas Neumann took over in September. However, while FT reports that Neumann was Schaeffler’s preferred candidate, the newspaper also points out that “he has acted solely in the interests of Continental.”

On 10 December, at the same time as announcing the multi-million euro cost cutting measures, Continental AG’s supervisory board extended Dr Karl-Thomas Neumann’s contact as executive board chairman and head of the Automotive Group for another five years. Dr Neumann has been a member of Continental’s executive board since October 2004 and its chairman since 1 2008.

Dr. Neumann, who holds a doctorate in electrical engineering, joined Volkswagen AG in Wolfsburg in 1999 after working at the Fraunhofer Institute for Integrated Circuits and Systems, Duisburg (1989-1993) and at Motorola GmbH (1993-1999) in Munich and Austin, Texas. There, he headed electronics research and the corporate-wide electronics strategy, as well as other areas.