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Business

No Help for Schaeffler After Continental Takeover, Merkel Says

German Chancellor Angela Merkel has ruled out government aid for Schaeffler Group, which is struggling with debt after its takeover of car-parts manufacturer Continental AG.

"We won't foot the bill for risky company decisions," Merkel was quoted as saying in the daily Bild Zeitung.

The paper reported that Schaeffler is seeking 3 to 5 billion euros ($3.8 - $6.3 billion) in new capital to help it with the 22 billion euros of debt it incurred after the merger with Continental.

The Herzogenaurach-based company has rejected criticism that the takeover, finalized last month, had been risky. Schaeffler bought Continental for about 8 billion euros, creating one of the world's largest car parts makers.

But the company's stocks took a tumble after reports began circulating last week that the company was looking for a billion euros in state assistance.

Schaeffler has also announced a reduction in hours for thousands of workers, and argues it is only seeking "interim" assistance in an effort to save more than 220,000 jobs in both companies.

"It's also a matter of ensuring that next-generation technologies remain in Germany in the long run and are further developed here," the company said in a statement.

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