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Wennemer Says More Acquisitions in the Cards

(Clacton, U.K./Tyres & Accessories) Continental AG purchased the Automotive Electronic business of Motorola and, say analysts, this deal looks reasonable.

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The acquisition price is only 60% of sales, in line which the acquisition price of Temic five years ago, and only 10% of Continental, which makes it easier to absorb and integrate.

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However, the analysts add a note of caution, saying that Continental management needs to succeed where Motorola failed – slow top-line growth and low margins. Most importantly, they suggest that Continental needs to fully digest this acquisition before moving on to the next one.

This advice comes after Continental Executive Board Chairman Manfred Wennemer told members of the press that the company wants to continue to make acquisitions in the U.S. following the announcement of the Motorola deal.

"We have improved our position in individual areas, but there are certainly still other areas where I can see our U.S. electronics business being strengthened," Wennemer said, although he declined to identify any specific takeover targets.

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