Eleven years after its acquisition of Siemens VDO for more than 11 billion euros, the German Continental is preparing to partially cede these activities. With 40,000 employees for a turnover The transmission division (Powertrain) is expected to be listed on the stock market from mid-2019 as part of a major reorganization, the second-largest German automotive supplier, behind Bosch, said Wednesday.
“In the next decade and beyond, the global automotive industry will experience the biggest and most profound upheaval in its history,” said Hanover Group boss Elmar Degenhart. We are approaching this transformation in time and looking towards the future. ” The sector is shaken by the debate about the end of the engine, accelerated by the diesel scandal, the rise of the electric car and the arrival of the autonomous vehicle.
Low growth and margin
The Powertrain division supplies fuel injection systems for diesel and gasoline engines to automakers such as Volkswagen. The division displays the rate of growth (about 5%) and the margin rate (about 6%) the lowest of the group. With its IPO, the group of 240,000 employees hopes to finance investments in future technologies, such as the electric battery.
Continental, which is 46% owned by the Schaeffler family group, will also split into three separate entities, which will be placed under the control of a holding company as of 2020: a first for tires (Continental Rubber) , a second for chassis, cockpits and safety that will be associated with autonomous driving technologies (Continental Automotive) and a third, Powertrain, for transmission systems.
IPO tires ‘conceivable’
This restructuring will result in operating costs of around 350 million euros. But by leveraging the technologies of the future, the group of 44 billion euros in revenue hopes to bring the turnover of the new Automotive Division from approximately 19 to 30 billion euros. Sign of the extent of his thoughts, he does not immediately plan to float its historic tire division, but sees a “conceivable option.”
Continental, which has 8,000 employees and 13 production sites in France, is not alone in restructuring itself. Volkswagen wants to float its heavyweight division and Daimler would consider the same option. Brake manufacturer Knorr-Bremse is also looking into this possibility. More broadly, the conglomerate ThyssenKrupp, which has just married its iron and steel business with the Indian Tata Steel, has lost its management while its shareholders consider dismantling.