Continental Purchase of Siemens VDO

Harnessing the force of two high-performance and innovative companies in the top tier of the global automotive supplier industry, Hanover-based Continental AG heads into a new era after closing the deal for acquisition of Siemens VDO Automotive AG. “We warmly welcome the employees from the former Siemens VDO Automotive AG. By consolidating forces, we will forge our Continental into one of the world’s foremost automotive suppliers,” said Continental Executive Board chairman Manfred Wennemer. Prior to this, the international automotive supplier had formally concluded the purchase of Siemens VDO Automotive AG, agreed upon on July 25 and approved without conditions by the EU Commission on November 29, and remitted to Siemens AG the purchase price of €11.4 billion, incorporating tax benefits of around €1 billion. The corporate operations acquired will be included on Continental’s consolidated balance sheet as of December 2007. In mid-October, Continental was able to secure a consortium of 39 international banks to finance the purchase. On October 30th, the company additionally concluded a capital increase of just under 10 percent, bringing in around €1.48 billion. “Following exhaustive preparation we can now tackle the integration with a flying start. It will take us another two to three months, however, to make a series of key decisions. This gives us enough time to thoroughly examine data that antitrust laws have so far barred us access to,” announced Wennemer.

“This applies in particular to information concerning sales, earnings and the number of employees by product group and plant. In the final analysis, the plans required for the operative business and especially for production will form the basis for the generation of synergy effects, paving the way for the emergence of a better and more efficient corporation from two top-notch companies as well.” Dr. Karl-Thomas Neumann, Executive Board member in charge of corporatewide technological development and the new Chassis & Safety and Powertrain divisions, stressed that with its expanded global operations, stronger product portfolio and more comprehensive automotive systems competence, the new Continental will be able to profit in special measure from future key auto industry trends: “Our innovative force and core competence cover precisely those automotive industry megatrends that will clearly dominate the upcoming years – safety, sustainability and Information".

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