Schaeffler sells 21 million Continental shares

According to a report from DB Equity Research Automotive, Continental’s majority shareholder has sold 21 million Conti shares at a market price of 81.50 euros each and is using the proceeds to cut its debt by 1.6 billion euros, bringing its debt down to 10.6 billion euros.

The figures themselves show that Schaeffler’s assault on Continental hasn’t been a success so far. This can be seen in the fact that Schaeffler’s shareholding in Continental has dropped from 90 per cent to its current level of 50 per cent within five years. Over this time Schaeffler’s staff has had to hump up for interest payments to banks.

Taking a good, hard look at the debt, which could only be reduced from 12 to 10.6 million euros, serves as a reminder that the Schaeffler Group only avoided insolvency following the Lehman disaster by the narrowest of threads. The latest transaction makes it clear that Schaeffler and Continental will remain independent companies, that a fusion or merger will not take place and that dreams of achieving greater synergy remain unfulfilled.

At any rate, all this may serve as a delayed consolation for former Conti heads von Grünberg and Wennemer, who wanted to attract Schaeffler as an anchor shareholder with a 20 to 25 per cent share. Had this scenario eventuated, Schaeffler would today have a significant influence over Continental and would be debt free.