Continental rejects Schaeffler's $17.8 billion takeover offer

16 July 2008

Mumbai: German tyre and auto components manufacturer Continental Corporation has rejected a €11.2 billion ($17.8 billion) takeover offer by the Schaeffler Group, saying the offer does not come close to the true value of Continental and lacks a convincing strategy.

On Tuesday, the Schaeffler Group informed Continental AG of its decision to make a takeover offer for the company at €69.37 per share in cash, valuing Continental at €11.2 billion.

''The executive board of Continental rejects the offer. The offer is highly opportunistic, does not come close to the true value of Continental, does not create trust and lacks a convincing strategic rationale,'' the company said in a website release.

If the family-owned ball-bearing Schaeffler succeeds in acquiring the Hanover-based group, which is three times its size, it would be the first time a German family has taken over a company listed in the country's blue-chip DAX index.

Late on Tuesday, Schaeffler, owned by German billionaire Maria-Elisabeth Schaeffler,  announced the terms of its offer and said it did not intend to break up Continental or slash jobs and that the two firms were a good fit.

Continental has appointed Goldman Sachs to advise it on a defence.