Hannover-based Continental AG is a leading automotive supplier and – according to the company – is “the choice of leading car manufacturers, offering award-winning tyres that deliver responsive braking in all weather conditions.”
The Benecke-Kaliko Group is the second-largest part of ContiTech. Continental has decided to increase its shareholding in the company from 50.1% to 99%, buying from DG Bank. Bamberger Kaliko will be separated from the group by a management-buyout.
Six of the largest tyre manufacturers have announced their intention to develop a global e-business purchasing company. Rubbernetwork.com is an independent company which will host a global exchange, including Conti, Cooper, Goodyear, Michelin, Pirelli and Sumitomo Rubber. Confidentiality is assured and the exchange will be open to all manufacturers and suppliers. It will be operating by the year end. ‘Significant’ savings and efficiencies in purchasing are predicted.
ThyssenKrupp is not able to bring its subsidiary steel company to the stock exchange for a reasonable price, due to current weak circumstances. Institutional investors were not sufficiently interested in the shares. The group calculated up to 4 bn Euros for the steel company. It is now unlikely that ThyssenKrupp could start a raid on Continental. The management made clear that it is streamlining the whole business and focusing, among other things, on the automotive field.
Despite excellent results and an on-going buy recommendation from Deutsche Bank, Continental shares are not rising. The management has announced that the “intelligent tyre” is to be fitted as OE from 2003 but refuses to name the car manufacturer. The management also feeds speculation regarding a joint venture partner for brakes in Asia. Will this help the share price to rise?
Platin is the private brand of German wholesaler Interpneu (Karlsruhe). Continental replaces the former producers.
It was the biggest day in Timisoara since the revolution, and it will perhaps set off another – this time in the tyre industry. The new tyre production facility was opened 20th October by Continental president, Dr Kessel, and Romanian Prime Minister, Mugur Isarescu, the latter facing the possibility of losing office in the coming election. Amongst the 400 attending the opening were representatives from Continental’s key suppliers and selected customers, as well as German and Romanian journalists. When the factory has reached its final stage it will produce 8 million car tyres a year, employing about 1,000 people. The article in November’s TYRES & ACCESSORIES shows that the factory tour revealed little new; we were shown assorted Japanese vulcanising equipment and ancillary machinery, but the state-of-the-art tyre construction machines were still under wraps. The iron curtain may have fallen, but for now there is a rubber curtain round the new technology at Timosoara.
With the exception of Peugeot, Porsche and Beru, other share prices from automobile and tyre companies have fallen to an all-year low. Companies in this category include DaimlerChrysler, Volkswagen, Kiekert, Delco Remy, Delphi, Phoenix and Johnson Controls, as well as Continental, Cooper, Yokohama, Toyo and Goodyear.
Michelin intends to increase its share of the growing and highly profitable high performance market. Any gain of market share would be at the expense of Pirelli and Continental.
An article in the German magazine Wirtschaftswoche suggests that the Thyssen-Krupp group is planning a take-over bid for Continental. Whether or not this is the case, it throws up some interesting possibilities and our article analyses whether such a course of action is feasible and what it would mean to Continental. The article also examines what the effects would be on the European tyre market and how the big tyre manufacturers might react to such an eventuality. Should Thyssen-Krupp mount a successful bid, the chances are that it might decide that Continental’s tyre division is surplus to requirements. Given such a situation, the implications for companies such as Michelin, Bridgestone and Pirelli are enormous and the article explores the different scenarios that might arise from such a course of action and the defensive measures that the tyre giants might take. Is the Thyssen-Krupp bid a figment of the imagination, or an attempt to boost Continental’s share price? The article concludes that Continental is a tempting target for a takeover bid (by somebody) and that its recent strategy makes the group more defenceless than in the past.
Deutsche Bank has announced that it will sell-off its industrial holdings which are worth about 40 billion Euro based on current share prices. This move has been made possible by recent German tax reform, effective from 2002, which makes capital gains by corporations tax free. The Bank has an 8 p.c. stake in the German tyre manufacturer Continental which is presently worth about 200 million Euro.
There is speculation among analysts that Michelin and Valeo could be dropped from the CAC 40. Continental has been ousted from the DAX Index and Goodyear from the Dow Jones Index recently.
Bridgestone is to join Goodyear, Continental, Michelin, Cooper, Pirelli, Yokohama and others in raising tyre prices in the USA to compensate for raw material price increases. Effective June 1st, Bridgestone tyre prices will rise 4%. Historically, Bridgestone has taken advantage of other manufacturers’ price increases in order to gain market share, so this latest announcement seems to indicate that this time the price rises will stick.
Dr. Wolfgang Ziebarth (50), former member of the Board of Management of BMW AG, will be appointed to the company’s Executive Board with effect from October 1st, 2000. In December, Dr. Ziebarth is to assume responsibility for the Continental Automotive Systems Group, thus succeeding Hans Albert Beller (62) who is to begin his planned retirement after building up the unit for the past seven years.
In 1999 Continental’s turnover and EBIT “only” rose around 35 % while for the same year a 70% increase in net profits to 234.7 million Euros (1998: 138.2 million Euros) is reported. Therefore Conti boss Dr. Stephan Kessel is some kind of “disappointed and astonished” with regard to the performance of the company’s shares. May this be another reason why Continental has revealed that it would float its shares on the New York Stock Exchange some time within the next three to five years?
Peter Schwerdtmann (52), spokesman of the Continental Group is leaving the company. The name of his successor has not yet been announced.
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