Continental AG is putting its focus entirely on tires and will split from its ContiTech business that include plastic extrusions and rubber parts.
Following the board's decision announced April 8, the Hanover, Germany-based company now enters a "preparatory phase" for the analysis and assessment of the next possible steps, with a sale of the group the "most likely option."
The potential sale of ContiTech, Continental said, would be implemented after the automotive group spin-off and sale of the Original Equipment Solutions (OESL) business. The company anticipates ContiTech will become independent sometime in 2026.
"Continental has already laid the groundwork for its realignment with the planned spin-off of its automotive group sector and aims to position the three group sectors — tires, ContiTech and automotive — as strong, independent companies," the company said.
With this restructure, ContiTech will operate as an independent material solutions specialist "with a strong industrial focus," the company said, noting Continental will become "a global company focused on tires."
In the final step, the "still overarching holding functions" will be transferred to Continental.
"Over the past 30 years in particular, Continental has used targeted acquisitions and organic growth to build up three strong group sectors in their respective industries," Continental CEO Nikolai Setzer said in a statement. "These [business units] are now ready for independence."
Calling the current market "highly dynamic," the CEO said now is the time "for focused, agile and decisive action," calling this move the "most far-reaching realignment" in the history of Continental.
"We are creating three strong, independent champions that will achieve their full growth and value creation potential as independent companies," Setzer said.