Continental AG's supervisory board has asked the company's executive board "to assess all aspects of a combination of Continental" and The Schaeffler Group, "in particular the financial feasibility of such a combination."
"We must carefully and responsibly determine whether a full combination of Continental and Schaeffler is in the economic interest of Continental," says Rolf Koerfer, chairman of Continental's supervisory board.
"The industrial logic of a combination is obvious," he adds.
Continental reports that talks with Schaeffler -- which currently holds a slighly less than 50% stake in the Hanover, Germany-based tire and auto systems supplier -- "are progressive very constructively."
"Although we are still in the conceptual phase of this process, the industrial know-how we have seen from The Schaeffler Group generates optimism. Schaeffler's expertise in mechatronics and our strenghs in the field of electronics and software systems complement each other very well.
"We will now dilligently analyze whether a combination of the two companies, while maintaing access to the capital market, would be viable and value-enhancing for our creditors and shareholders."
The assessment process is scheduled to be completed by the end of July.
