As of June 28, the Schaeffler Group has consolidated its operational businesses and its share in Continental AG under a corporation called Schaeffler GmbH.
This company, based in Herzogenaurach, Germany, will function as a management holding for the operational businesses of the Schaeffler Group and is wholly owned by the Schaeffler family.
This move is widely seen as a further step towards a merger between Schaeffler and Continental, and establishing a limited liability company for the operational business and Schaeffler’s 75% share in Continental fences them from Schaeffler’s debt-laden core private partnership.
Reuters also reports that Continental AG plans to issue a high-yield bond “within days” to restructure its debt, taking it a step closer to a Schaeffler merger. A company source quoted by the news agency said he expected a bond of 1 billion to 1.5 billion euros to be issued within the next couple of days, and a banking source said the volume could even reach 2 billion euros.
As dictated by German rules, Schaeffler GmbH will have a supervisory board of 20 members. Schaeffler says the establishment of Schaeffler GmbH will cause “no significant change” for employees, customers and suppliers as their points of contacts within the Schaeffler Group will remain unaltered and the operative business is not directly affected.
“The conversion into a corporation is a very significant step for us towards the capital market. It provides the Schaeffler Group with greater strategic flexibility. In doing so we will preserve the values, which we stand for as a family-owned business,” said Schaeffler Group majority shareholder Maria-Elisabeth Schaeffler. (Tyres & Accessories)
