Continental denies dropping Schaeffler merger

FRANKFURT (BestGrowthStock) – German automotive supplier Continental AG (CONG.DE: ) denied a report that it no longer aims to merge with bearings maker Schaeffler.

German monthly Manager Magazin had on Tuesday cited company sources as saying Continental’s advisers — Perella Weinberg, Freshfields and Ernst & Young — had presented a report to the company’s management board this month, showing a merger would bring very little financial gain.

“Our goal remains a combination of the two companies, for which we are preparing,” Continental said in a statement.

“We have not yet agreed on a concrete timetable with the major shareholder (Schaeffler).”

Schaeffler declined to comment on the report, referring to Continental.

Manager Magazin had said Continental’s advisers recommended Schaeffler merge its automotive business with Continental and keep a 35 percent stake in the company.

“A 35 percent … stake of the major shareholder (Schaeffler) in Continental is made up and was never discussed,” Continental Chairman Wolfgang Reitzle said in the statement.

Schaeffler took control of the much larger German auto supplier about two years ago after launching a hostile $18 billion bid in which it ended up collecting more shares than it could afford, lumbering itself with billions of euros of debt.

Schaeffler and Continental have been planning to merge their businesses but Schaeffler Chief Executive Juergen Geissinger in September backed away from committing to a deal any time soon.

A merger would create an automotive supplier with more than 30 billion euros ($39.5 billion) in annual sales and about 200,000 employees.

Shares of Continental were up 1.8 percent at 60.46 euros by 1618 GMT, in line with the STOXX Europe 600 Automobiles & Parts (.SXAP: ) index.

($1=.7599 Euro)

(Reporting by Maria Sheahan and Frank Siebelt; editing by David Hulmes)

Continental denies dropping Schaeffler merger