General interest press release
Continental Harnesses Forces as Purchase of Siemens VDO Ushers in New EraHanover/Regensburg, Germany, December 05, 2007 - International Automotive supplier welcomes new employees
- Company to vigorously implement prepared integration plan
- Wennemer: Final decisions to be made in 2 to 3 months after detailed review of data
- Customers and investors rely on the company's superior competence and broad product portfolio, particularly in the megatrend areas of safety, sustainability and information
Harnessing the force of two high-performance and innovative companies in the top tier of the global automotive supplier industry, Hanover-based Continental AG heads into a new era after closing the deal for acquisition of Siemens VDO Automotive AG. “We warmly welcome the employees from the former Siemens VDO Automotive AG. By consolidating forces, we will forge our Continental into one of the world’s foremost automotive suppliers,” said Continental Executive Board chairman Manfred Wennemer on Wednesday in Regensburg.
Prior to this, the international automotive supplier had formally concluded the purchase of Siemens VDO Automotive AG, agreed upon on July 25 and approved without conditions by the EU Commission on November 29, and remitted to Siemens AG the purchase price of €11.4 billion, incorporating tax benefits of around €1 billion. The corporate operations ac¬quired will be included on Continental’s consolidated balance sheet as of December 2007. In mid-October, Continental was able to secure a consortium of 39 international banks to fi¬nance the purchase. On October 30th, the company additionally concluded a capital increase of just under 10 percent, bringing in around €1.48 billion.
“Following exhaustive preparation we can now tackle the integration with a flying start. It will take us another two to three months, however, to make a series of key decisions. This gives us enough time to thoroughly examine data that antitrust laws have so far barred us access to,” announced Wennemer.
“This applies in particular to information concerning sales, earnings and the number of em¬ployees by product group and plant. In the final analysis, the plans required for the operative business and especially for production will form the basis for the generation of synergy ef¬fects, paving the way for the emergence of a better and more efficient corporation from two top-notch companies as well.”
On the basis of planning to date, Continental anticipates net synergy effects in the order of at least €170 million as of 2010. “From what we know at the moment, we would be disappointed if it remained at this conservatively estimated sum. The amount will presumably be higher. We will be able to provide more details in the next ten weeks,” announced Wennemer.
Dr. Karl-Thomas Neumann, Executive Board member in charge of corporatewide technologi¬cal development and the new Chassis & Safety and Powertrain divisions, stressed that with its expanded global operations, stronger product portfolio and more comprehensive automo¬tive systems competence, the new Continental will be able to profit in special measure from future key auto industry trends: “Our innovative force and core competence cover precisely those automotive industry megatrends that will clearly dominate the upcoming years – safety, sustainability and Information".
"In the Chassis & Safety division, we intend to integrate high-quality components in the area of brake systems, sensors and chassis to form a safety concept - called ContiGuard® - that will make for zero crashes and injuries in the future. We are likewise well placed with respect to “zero emissions”, as envisioned for the future. We have, for instance, set standards with pre¬cise and highly-efficient piezo injection systems for diesel and gas engines, as well as with hybrid drive solutions or roll-resistance-optimized tires. In the Powertrain division we are de¬termined to live up to our motto “Experience passion-driven mobility” by offering innovative products and system solutions that make diesel- and gas-engine vehicles more economical, reliable, powerful and eco-friendly,” said Dr. Neumann.
The strategic goal of the new Interior division is expressed in the slogan “Always On”. “Viewing ourselves as information managers in vehicles, we intend to optimize the flow of information. We will develop new functions that establish a link with the vehicle surroundings and present information in a way that motorists can grasp intuitively. The new Interior division is perfectly positioned to do this. Its portfolio extends from instrument clusters and access and control systems to audio and navigation platforms for cars and commercial vehicles,” added Wennemer, responsible for the new Interior division.
With sales of more than €25 billion (2006) and a current workforce of approximately 150,000 employees at more than 200 locations (plants, research centers, test tracks) in 36 countries worldwide, the Continental Corporation is now among the top five in the automotive sup¬plier industry. The Corporation is organized into six divisions:
- With more than €5 billion in sales, over 27,000 employees and more than 65 loca¬tions worldwide, the new Chassis & Safety division, headed by Dr. Ralf Cramer, is positioned strategically as worldwide market and technology leader for brake and chassis systems, the networking of active and passive safety systems, and sensors.
- With more than €5 billion in sales and over 27,000 employees at approximately 70 locations worldwide, the new Powertrain division, headed by Dieter Rogge, offers products and system solutions for powertrain, engine management, injection technol¬ogy, sensors, actuators and hybrid technology. It lays claim to worldwide market and technology leadership in the area of economical and eco-friendly driving.
- With more than €6 billion in sales, the new Interior division positions itself as world¬wide market and technology leader for information management with systems that provide a link between the vehicle and the driver and passengers, between different vehicles, and between the vehicle and the infrastructure in which it operates. The division, with more than 33,000 employees and approximately 70 locations worldwide, is headed by Helmut Matschi.
- With approximately 25,000 employees and annual sales of close to €4.7 billion (2006) the Passenger and Light Truck Tires division is under the responsibility of Manfred Wennemer. Following conclusion of the joint venture with Matador, Continental is now No. 1 in passenger car tires in Europe and No. 4 worldwide. Since 2003 Continental has also been the leading supplier of original equipment passenger car tires in the European market and the leading manufacturer of winter and tuning tires.
- With more than 8,000 employees and annual sales of close to €1.5 billion (2006), the Commercial Vehicle Tires division, headed by Executive Board member Dr. Hans-Joachim Nikolin, offers bus, truck and industrial tires for the most diverse service ar¬eas and application requirements. The products are all successful in the original equipment and replacement trade.
- The ContiTech division is the world's major manufacturer in the field of non-tire rub¬ber and plastics technology. As a development partner and OEM, the company de¬velops and produces functional parts, components and systems for the automotive industry, machine and apparatus manufacturing, rail vehicles, printing, the building trade, the chemical and petrochemical industries, maritime navigation and aviation, and mining. Executive Board member Gerhard Lerch is responsible for the division, which realized sales of close to €2.9 billion in 2006 and employs nearly 22,000.
With annual sales of more than €25 billion (based on 2006 figures), the Continental Corporation is one of the top five automotive suppliers worldwide. As a supplier of brake systems, systems and compo¬nents for the powertrain and chassis, instrumentation, infotainment solutions, vehicle electronics, tires and technical elastomers, the corporation contributes towards enhanced driving safety and protection of the global climate. Continental is also a competent partner in networked automobile communication. The corporation currently employs approximately 150,000 at nearly 200 locations in 36 countries.
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