Hanover-based auto supplier Continental AG approved a takeover bid by smaller rival Schaeffler Group, ending weeks of wrangling after the company hiked their earlier offer and agreed to limit its stake.
Car parts maker Continental has finally agreed to a takeover
The agreement came Thursday, Aug. 21, after family-owned bearings manufacturer Schaeffler increased its bid to 75 euros ($110.61) per share from the 70.12 euro bid they offered last month, the companies said. Schaeffler would maintain a minority share of up to 49.99 percent in tire maker Continental for four years under the deal.
Continental said the overall package, which includes stipulations to protect the interests of Continental's employees and shareholders, was "acceptable." As part of the package, Schaeffler agreed not to split up the company or demand any sales or substantial structural changes.
A casualty of the compromise
CEO Manfred Wennemer will step down at the end of August
Continental chief executive Manfred Wennemer, who had opposed the deal from the start, however, has asked the supervisory board to be released from his responsibilities by Aug. 31, according to a statement from Continental. The board agreed but has not yet named his successor.
The 60-year-old had been CEO since September 2001, helping to oversee its expansion and shift production to low-cost markets. According to the London-based daily Financial Times, Wennemer had initially referred to Schlaeffler as "egotistical, autocratic and irresponsible."
Still, a slump in the automotive industry along with an 11 billion euro acquisition by the larger firm led to a retreat in Continental's share prices and made the group vulnerable to a takeover.