Continental rose to a four-month high in Frankfurt trading as the company said it aimed to cooperate more closely with Schaeffler, gaining as much as 3 euros, or 15%, to 22.97 euros.
“Schaeffler is working together with Continental on options for future cooperation,” Hannes Boekhoff, a spokesman for Hanover, Germany-based Continental, said in an e- mailed response to questions. “Integration is among the options that we’re reviewing” during “constructive” talks.
Continental CEO Karl-Thomas Neumann said on April 23 that he plans to submit a new strategy that addresses cooperation with Schaeffler by Aug. 1. Options may also include a share sale and asset disposals, he said at the time. Closely held Schaeffler, which is based in Herzogenaurach, Germany, controls 90.2% of Continental.
Schaeffler paid 75 euros a share for Continental, making its offer in August before collapsing financial markets helped push the auto industry into its worst crisis in decades. Schaeffler, which makes transmission parts and ball bearings for cars, planes and windmills, announced plans a week ago to reduce labor costs by 250 million euros as part of an effort to manage about 11 billion euros in debt.
Few banks have lent to both manufacturers, so “there might be a struggle to come to a solution,” Marc-Rene Tonn, an analyst with M.M. Warburg in Hamburg, said in a research report, adding that he would “appreciate” the companies combining.
Schaeffler and Continental have appointed a joint adviser to help review options, they said today in a joint statement. (Tire Review/Akron)
