Continental Eyes Revamp

Continental AG is holding exploratory talks with advisers on possible changes to its structure, a move people familiar with the matter said could amount to a major overhaul and potential breakup of the German auto-parts supplier.

The company is in the “early stages” of analyzing its organization with the aim of becoming more flexible, according to a statement on Tuesday. While the review is “wide open” and no decisions have been made, Chief Financial Officer Wolfgang Schaefer said in a subsequent telephone interview that the firm may provide an update within six months, Bloomberg reported.

Under scenarios being considered, the manufacturer could create a holding company for its divisions and then sell shares in the more profitable units, such as the tire business, or combine some operations with rivals, said the people, who asked not to be identified because the matter is private. The shares ended 5.4% higher at a record €251.30.

Reorganization at one of the world’s largest car-component makers would come at a time when the industry is faced with a momentous shift to electric and self-driving vehicles. Other companies including premium-vehicle maker Daimler AG and parts suppliers Delphi Technologies Plc and Autoliv Inc. have also carried out recent changes in the way they are organized.

Any move by Continental will need the blessing of the Schaeffler family, the largest shareholder with a roughly 45% stake. At the height of the financial crisis in 2008, the clan’s industrial bearing and powertrain-manufacturing company, now called Schaeffler AG, faced dramatic financial bottlenecks when a takeover approach for Continental backfired after credit markets contracted.