By Liz White, ERJ staff
Hanover, Germany-Continental AG wants to consolidate its ContiTech subsidiary with the Phoenix AG rubber business â€œwithout delay,â€ following the European Commission's approval of the takeover.
Continental made its original bid for Phoenix shares at Euro 15 each, or some Euro 290 million in total, in May this year.
"We are aiming to conclude a control and profit and loss absorption agreement between Phoenix AG and our ContiTech Holding GmbH as well as to merge Phoenix and ContiTech," said Continental chairman Manfred Wennemer, 28 Oct.
The necessary steps will be taken, â€œpromptly upon the full completion of our takeover offer to Phoenix shareholders,â€ expected by 3 Nov, Wennemer added.
Approval of the Annual Shareholders' Meeting of Phoenix is one of the steps required, Conti said.
Restructuring measures will make it possible to consolidate the commercial operations of Phoenix and ContiTech, Wennemer continued.
He previously told ERJ that such measures, bringing possible cost benefits of about Euro 30 million, are likely to involve some reorganisation of the German facilities; For example, the business will not need two headquarters in Germany, Wennemer said, in an interview in May, adding that some manufacturing cutbacks in high-cost locations-but not complete plant closures-were possible.
Conti wants rapid combination of the two businesses, â€œso that the benefits of the merger can be realised quickly in the interest of the shareholders and the employees of the companies involved," stressed Wennemer.
EC approval for the merger depended on a couple of divestments to avoid Conti having a dominant market position in air springs and steel-cord conveyor belts.
The group is selling Phoenix's stake in its Vibracoustic joint venture with Freudenberg & Co. KG, which makes parts for vibration control and suspension technology, and divesting Phoenix's business in original equipment airsprings for commercial vehicles.
Continental has also agreed to dispose of a heavy conveyor belt production line.
In both cases, Conti has made preliminary agreements with purchasers approved by the EC.
Wennemer said that investors, financial markets and politicians have all reacted favourably to the EU decision, affirming â€œour view that we are all working together on a powerful and future-oriented project."