Continental AG Strikes EUR4 Billion Deal to Sell ContiTech Unit to Lone Star Funds
Continental AG (CON.F) agreed to sell its ContiTech unit to an affiliate of Lone Star Funds for 4 billion euros, according to a July 4 release. The investment company will also make up to 250 million euros in performance-based payments in subsequent years for the acquisition of the rubber and thermoplastic products business. The German automotive parts manufacturer anticipates a cash inflow of 3.1 billion euros, 2.5 billion euros of which will be used to pay a special dividend or a combination of dividend and share buybacks. Pending regulatory approval, the transaction will complete Continental's strategic realignment, turning it into a pure-play tire manufacturer. Upon completion, Lone Star Funds will take over all of ContiTech's global business operations.
Continental AG (CON.F) agreed to sell its ContiTech unit to an affiliate of Lone Star Funds for 4 billion euros, according to a July 4 release.
The investment company will also make up to 250 million euros in performance-based payments in subsequent years for the acquisition of the rubber and thermoplastic products business.
The German automotive parts manufacturer anticipates a cash inflow of 3.1 billion euros, 2.5 billion euros of which will be used to pay a special dividend or a combination of dividend and share buybacks.
Pending regulatory approval, the transaction will complete Continental's strategic realignment, turning it into a pure-play tire manufacturer.
Upon completion, Lone Star Funds will take over all of ContiTech's global business operations.