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German Government to Restart Talks With Schaeffler

The German government is about to reopen support negotiations Schaeffler Group if, according to news reports, the company agrees to reorganise its financing with lenders. “When there is such a plan, there will be further negotiations,” Economy Ministry spokesperson Steffen Moritz told Bloomberg in an email.

Meanwhile, Abu Dhabi’s International Petroleum Investment Company (IPIC) sovereign wealth fund is reportedly considering taking a stake in either Schaeffler Group or Continental AG, according to Financial Times Deutschland. The unconfirmed reports suggest a stake of no less than 20 per cent and “probably” more than 25 per cent in one of the two companies is being considered.

10th February 2009/by Tyrepress Editors

Pirelli Takeover Rumours Cause Conti Shares to Rise

Shares in Continental AG rose 11 per cent on February 6 in response to circulating rumours that Pirelli & C SpA may wish to acquire the company’s tyre business – a move that, should it take place, would give the erstwhile competitors a comprehensive product portfolio. Reuters quoted an unnamed trader as saying “There is a rumour that Pirelli may be interested in Conti’s tyre business.”

Italian magazine Il Mondo has reported that banks have approached the Italian company about buying the Conti business, however neither Pirelli nor Continental have confirmed or denied any such activity. The Il Mondo article claims that Pirelli executives have conducted, on separate occasions, meetings with JP Morgan, Deutsche Bank, Mediobanca and a number of advisers.

6th February 2009/by Tyrepress Editors

Sibur Holding Progressing with Amtel-Vredestein Deal

An article published by the Moscow Times appears to confirm speculation that Sibur Holding will acquire control of Amtel-Vredestein. The January 26 news piece prints comments from a company executive that Sibur will issue bonds as part of the deal, a possibility previously reported by Russian business daily Vedomosti.

The previous merger arrangement was cancelled last September due to an unavailability of credit to fulfil the necessary terms and conditions. However, Amtel-Vredestein’s press department in Moscow told Tyres & Accessories on September 30 that the deal was still “an ongoing work in process.”

27th January 2009/by Tyrepress Editors

Sibur to Buy $600M of Amtel-Vredestein Debt

On January 22 Amtel-Vredestein N.V. reported its postponement of the general meeting of shareholders planned for the second half of the month. This decision was taken, the company discloses, because it is not yet “in a position to submit a decision on the disposal of its subsidiary Vredestein Banden B.V. to the general meeting for approval”. Amtel-Vredestein says plans regarding the subsidiary’s disposal are continuing, however it admits the sale process “may be impacted by certain legal actions taken by creditors of the company”. In a press statement, the company says it intends to conclude the sale process as soon as possible, thereby offering maximum value to all stakeholders. This is, admittedly, a best-case scenario; the statement contains the caveat that there can be no certainty of the successful sale of Vredestein Banden B.V.

23rd January 2009/by Tyrepress Editors

Is Schaeffler Seeking Complete Control of Conti?

Speculation is mounting that Schaeffler Group executives are positioning themselves for a complete takeover of Continental AG. Following the ball-bearing maker’s successful bid for just under half the company, Schaeffler Group, is now responsible for 11 billion euros ($14.3 billion) of debt relating to the deal. However, the increasing negative global economic climate, especially with relation to the automotive supply business has led some observers to characterise Schaeffler as being backed into a corner. According to Bloomberg, “Schaeffler has one way out: gaining full control of Europe’s second-largest car-parts maker.”

Continental will now hold an emergency supervisory board meeting on 24 January (tomorrow), a gathering that has been arranged in the wake of Schaeffler’s reported demands for the resignation of Continental supervisory board chairman Hubertus von Gruenberg. According to the Financial Times this threat was delivered alongside an ultimatum – either Continental forces out von Gruenberg and gives Schaeffler representatives four seats on the board or the ball bearing member will push for the replacement of all 20 investor representatives on the 20-member board.

23rd January 2009/by Tyrepress Editors

Continental to Increase Share Capital by 1 Billion Euros

Continental AG executives are reportedly planning to increase the company’s share capital by around 1 billion euros. Alan Hippe, Conti CFO and head of the group’s tyre and non-tyre products division told Reuters that the move was designed to secure the company’s financial position: “In view of the difficulty to predict how things will develop over the course of this year, it’s completely logical to think about strengthening your equity capital…”

Hartmut Meine, a member of Continental’s supervisory board told the news agency that the automotive supplier is already in preliminary talks with potential subscribers, which could include “industrial companies, family-held groups or financial investors.” Reuters reported that Continental shares fell up to a fifth following news of the capital increase plan. At the time of going to press, Continental’s share price was around 20.90 euros. The fact that the current share price is so low may mean that Continental will use the maximum third of its existing equity to raise the funds, Reuters reported.

15th January 2009/by Tyrepress Editors

Bridgestone Share Rating Cut to “Sell”

Bloomberg is reporting that the slump in the car market and subsequent deflation in demand for car parts has led to shares in tyre manufacturers on the Tokyo Stock Exchange entering a slump. The decrease in prices has led to Goldman Sachs analysts to downgrade its rating of shares in the world’s largest tyre maker by sales, Bridgestone, from “buy” to “sell.”

Close of play on 15 January saw Bridgestone decline 4.2 per cent to 1,279 yen, while other large manufacturers Yokohama and Sumitomo decreased 7.9 and 6.6 per cent, to finish at 375 and 652 yen respectively. Both companies are also rated as “sell” by Goldman Sachs. Yuki Kimura, writing in his analyst report, said that manufacturers “will likely face increasing pressure to cut costs from carmakers, which are looking at deteriorating results.”

15th January 2009/by Tyrepress Editors

Investments Banks Hold 35.75% Stake in Conti

Investment banks B. Metzler seel. Sohn & Co Holding AG and Merrill Lynch have bought shares equating to a combined voting stake of 35.75 per cent in Continental AG. According to a Reuters report, Metzler has built a 19.5 per cent voting stake, while Merrill Lynch International holds 16.25 per cent. The two companies are now the largest shareholders after Schaeffler Group (49.9 per cent). On 22 December 2008 Metzler and Sal. Oppenheim bought stakes of 4 per cent and 5.5 per cent each.

14th January 2009/by Tyrepress Editors

Schaeffler Concludes Takeover of Continental AG

The Schaeffler Group has completed its planned takeover of Continental AG, paying 75 euros per share to the depositary banks of those who tendered their shares to Schaeffler. As a result of all the recent share trading, Schaeffler Group holds 49.90 per cent of the voting stock of Continental AG and is therefore the company’s largest shareholder. At the peak of the complicated transaction Schaeffler Group held up to 90 per cent of Conti stock, although Schaeffler has now transferred the additional shares tendered to financial institutions. The European Commission gave clearance for Schaeffler to go ahead with its plans to buy into Continental AG on 19 December 2008.

“The conclusion of the takeover clears the way for integrating the companies quickly and in a pragmatic manner. 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. This is also what our staff and customers expect from us”, explained Dr. Juergen M. Geissinger, Schaeffler Group president and CEO.

In the company’s completion statement Dr Geissinger again failed to define Continental AG’s highly profitable tyre and rubber businesses as “strengths.” While he did remark that the combined companies 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 fact that he did not mention tyres or rubber products means there are still question marks over the future of these parts of the business.

8th January 2009/by Tyrepress Editors

Second Private Bank Acquires Conti Share From Schaeffler

In addition to its sale of 5.48 per cent of its share in Continental AG to Sal. Oppenheim, the Schaeffler Group has sold a 3.99 per cent parcel of shares to the German private bank B. Metzler seel. Sohn & Co. In a January 5 regulatory filing, Continental said the amount of its voting rights held by Schaeffler had thus fallen from more than 20 per cent to 15.2 per cent.

7th January 2009/by Tyrepress Editors

Porsche Increases Stake in VW

Company News, Product News

Porsche has increased its stake in Volkswagen ordinary shares to 50.8 per cent. Analysts Morgan Stanley say that, while the timing of such a move was impossible to predict, this is absolutely in line with Porsche’s stated strategy of ultimately moving to 75 per cent of Volkswagen and seeking a domination agreement.

With this move, Porsche also acquires indirect control over Scania through VW’s 68.6 per cent voting stake in the Swedish truck maker. Porsche has made it clear that is has no strategic interest whatsoever in Scania or any interest in buying Scania shares. However, Swedish law requires Porsche to make a mandatory bid for Scania.

6th January 2009/by Tyrepress Editors

Schaeffler Sells 5.5% of its Conti Shares to Sal. Oppenheim

Schaeffler Group has reportedly transferred 5.5 per cent of the shares it holds in Continental AG to Sal. Oppenheim Jr. & Cie. Stock tendered by Continental investors gave Schaeffler direct and indirect control of 90 per cent of the company, almost doubling an agreed limit of 49.99 per cent. Schaeffler Group spokesperson, Detlef Sieverdingbeck, told Tyres & Accessories that the transfer of shares to Sal. Oppenheim was the first such move and that more will follow.

5th January 2009/by Tyrepress Editors

Schaeffler’s Takeover of Continental Gets EU Approval

The EU Commission has granted approval of the takeover of Continental AG by the Schaeffler Group. According to an official statement released by the company shortly after the approval was granted on Friday 19 December, “the Schaeffler Group will now conclude the takeover without delay.” Schaeffler will pay 75.00 euros per share to the depositary banks of those shareholders who have tendered their shares to Schaeffler, on or around 8 January 8 2009. The depositary banks will then credit these payments to the shareholders’ accounts. According to the company, shares tendered for sale can be traded up until 2 January 2009.

“The takeover of Continental AG is a decision of far-reaching strategic importance for the Schaeffler Group. With Schaeffler and Continental we’re bringing together two excellently positioned German technology leaders. This merger will create one of the most successful global automotive suppliers with outstanding expertise in the high-growth fields of energy efficiency and alternative powertrain systems. It is our target to spearhead the global market,” emphasized Dr. Jürgen M. Geissinger, Schaeffler Group president & CEO.

22nd December 2008/by Tyrepress Editors

Conti Shares Fall Amid Rumours of EU Decision Delay

Continental today fell 6.5 per cent as stock brokers speculated the EU decision on the validity of the company’s proposed takeover by Schaeffler Group may be delayed. “These decisions usually come by noon (local time) and as there has been no accouncement yet, investors are getting worried that the decision may be delayed,” a Frankfurt-based told AFX news agency.

19th December 2008/by Tyrepress Editors

Conti/Schaeffler EU Ruling Due Tomorrow

Continental AG shares rose to one-month high as the stock market speculated that European regulators will give the Schaeffler Group takeover bid the green-light tomorrow. Bloomberg reported that Conti stock surged 19 per cent to 42.70 euros during the day’s trading.

Meanwhile dormant tensions in the seemingly inharmonious takeover appear to be mounting again following newspaper reports that Schaeffler is planning to force out Hubertus von Gruenberg. Continental’s supervisory board chairman. According to Handelsblatt, “Von Gruenberg wants to establish a ‘leading role’ for Continental within the merged company, an effort that Schaeffler CEO Juergen Geissinger is attempting to thwart.”

18th December 2008/by Tyrepress Editors