Schaeffler, Conti agree deal; Wennemer to quit
ERJ staff report (DS)
Hannover, Germany -- Continental AG and Schaeffler KG have agreed a compromise which allows Schaeffler to buy Conti, eventually. The rights and interests of Conti employees and other stakeholders are to be overseen by former Chancellor Dr. Gerhard Schröder. Manfred Wennemer will resign his responsibilities as chief executive of Continental AG by the end of this month.
Shareholders most likely will have until September 16, 2008 to decide whether to accept the improved offer.
Schaeffler will limit its position to a minority shareholding in Continental AG (up to 49.99 %) for a period of four years, to support the ongoing strategy and business policies of Continental AG's management board while maintaining its current market and brand appearance and must not demand a sale of activities or seek other material structural measures. Meanwhile the two companies will work together to reach a joint strategy, notably in the powertrain area.
In addition, it has been agreed that there will be no changes to Continental AG's form of incorporation, its corporate seat, headquarters or business divisions, its listing on the stock exchange, its dividend policy or an increase of its debt to equity ratio against the wishes of Continental AG.
Former German Chancellor Dr. Gerhard Schröder has been given the power to enforce all obligations of Schaeffler at any time by legal action or out of court. He is entitled to request information from Schaeffler about their level of compliance with their obligations under the Investment Agreement.
Continental CEO, Manfred Wennemer (60) has asked the supervisory board to be released from his responsibilities by August 31, 2008. The supervisory board has agreed to this request with great respect for Wennemers achievements. His successor will be appointed in the immediate future.
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Press release from Conti (Schaeffler agreement)
Press release from Conti (Wennemer resignation)
Press release from Schaeffler (German Language)
Press release from Schaeffler (auto translated to English from German)
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