Tire maker Continental says it may spin off automotive-electronics unit employing 100,000

By Steve Goldstein

German tire maker Continental said Monday it may spin off the loss-making automotive-electronics unit that employs 100,000 people.

"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," Continental Chief Executive Nikolai Setzer said.

The spin could "create competitive opportunities" and give the ability to invest in a company solely focused on automotive electronics, the company said.

Continental shares (XE:CON) moved off the lowest levels of the day after the announcement, going from a decline of about 4% to a decline of 2%.

The company said the board will make a decision by the fourth quarter and potentially put it to shareholders by next year. Continental says if it does spin off the unit, it would also be onto the Frankfurt Stock Exchange where its current listing is.

Continental said the division has carved out a strong market position for brake and comfort systems, as well as sensor solutions and displays. The company is developing software, architecture platforms and assistance systems for software-defined and autonomous vehicles.

The remaining business would also employ about 100,000, focused on tires and industrial solutions.

-Steve Goldstein

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08-05-24 0803ET

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