Continental AG announced on 5 August 2024 that it is considering a spin-off of its Automotive group sector as an independent company This decision follows a strategic review by the company’s Executive Board, aimed at exploring how to best position Continental’s various business sectors for “future success in response to the rapidly changing automotive industry”.
The Executive Board will conduct a detailed evaluation of the spin-off, with a decision expected in the fourth quarter of 2024. If approved by the Executive and Supervisory Boards, the proposal will be presented at the 2025 Annual Shareholders’ Meeting, with the spin-off potentially being completed by the end of 2025. Preparations for this possible separation are already underway.
The Automotive division, which reported sales of approximately €20.3 billion in the last fiscal year and employs around 100,000 people, would become an independent company under this plan. The division has been consolidated into a single legal entity since 2022 and is involved in developing brake systems, sensor solutions, displays, and software for autonomous vehicles.
“Our strategy aims to increase our value creation. This involves systematically analyzing how we can best position our group sectors for success. Markets and customers, especially in the automotive industry, have evolved extremely dynamically in recent months. Looking ahead, sharply fluctuating regional developments in the markets as well as the software-driven technology transformation will require even greater flexibility and entrepreneurial freedom. Against this backdrop, we are aiming to divide Continental into two independent companies,” said Continental CEO Nikolai Setzer in Hanover on Monday.
In a related development on 6 August 2024, Continental announced that it would suspend the planned carve-out of its User Experience business area, which focuses on vehicle display solutions. This business area will remain part of the Automotive division, and leadership changes within the division have been implemented as part of this reorganisation.
If the spin-off proceeds, Continental’s profitable Tires and ContiTech sectors, which together generated sales of €20.8 billion last year, will remain under the Continental umbrella.