German automotive supplier Continental AG has launched a bid to buy out competitor Phoenix AG and fold it into its own ContiTech unit.
Phoenix Chairman and major shareholder Claas E. Daun has agreed to the takeover offer of 15 euros ($18.50) per share, Continental announced March 29. The full deal would be worth about 227 million euros ($280.6 million).
Both companies are best known for their rubber systems, but both Hamburg, Germany-based Phoenix and Hanover, Germany-based Continental also process plastics.
Phoenix compounds its own thermoplastic elastomer under the Phoenoprene name and uses TPE along with rubber in automotive sealing systems, and combinations of polyamide, polyester and other thermoplastics in hoses for fuel, cooling and heating systems.
Continental does injection and blow molding, using TPE for seals, shock absorbers and steering and brake systems, and nylon in hydraulic gearshift assemblies.
Phoenix posted 1.15 billion euros ($1.42 billion) in sales for 2003. Its stock was trading at about 13 euros ($16) per share prior to Continental's announcement.
The ContiTech division had 1.76 billion euros ($2.2 billion) in sales last year. All of Continental saw 11.4 billion euros ($14 billion) in sales for 2003. Executives estimate that combining the unit with Phoenix will create savings of 30 million euros ($37 million) annually.
Both groups have similar operations, with automotive sealing systems, fluid-handling units, vibration control and conveyor belt production.
Continental must have a full offer prepared within four weeks according to German law, Phoenix executives said, noting they will examine the final bidding document carefully before releasing any further statement.