Restructuring looms large for Continental Corporation
Continental AG, a 150-year-old company, is embarking on a significant restructuring that will reshape its business landscape[1][2][3][4]. The key changes include the spin-off of its Automotive division and the divestment of the ContiTech business.
The spin-off of the Automotive division, to be named Aumovio, is scheduled for September 18, 2025. This independent company will focus on the Automotive and Contract Manufacturing sectors, aiming to improve operational agility[1][2][4]. An IPO or Capital Market Day event in 2025 will highlight the financial milestones of Aumovio[1][2][4].
On the other hand, the divestment of the ContiTech business, which focuses on industrial technology, is expected to take place in 2026. The sale could find new owners before the end of the year[2][3]. ContiTech's sales are estimated at €5-6 billion with adjusted EBIT margins of 11-13% in the medium term[2][3].
With these moves, Continental AG will concentrate solely on its tire business. The company aims to improve shareholder value by specializing operations and enhancing competitiveness amid global tariff and FX headwinds affecting margins[1][2][3]. The tire business is expected to generate sales of €14.5-16 billion with a target EBIT margin around 13-16% by the medium term[1][2][3].
The strategic rationale behind these changes aligns Continental with industry trends of specialization, aims to unlock latent value, and improve resilience and returns[1][3]. Analysts expect the chain of transactions to meaningfully improve operational focus and financial performance by the late 2020s, with an adjusted EBIT margin target of approximately 14.5% by 2027[1][3].
Meanwhile, Thyssenkrupp is pushing ahead with the independence of its marine subsidiary TKMS. The independence of TKMS will be discussed at an extraordinary general meeting on Friday[5].
These developments are significant milestones for Continental and Thyssenkrupp, and the current podcast episode contains key aspects of the upcoming events for the 32nd calendar week[6]. After restructuring, Continental is expected to be significantly more profitable than it is today[7]. Commerzbank will present its second-quarter figures on Wednesday[8].
[1] https://www.continental-corporation.com/en-en/investors/ir-news/continental-announces-strategic-restructuring-to-focus-on-tires-business-and-improve-shareholder-value.html [2] https://www.continental-corporation.com/en-en/investors/ir-news/continental-to-divest-contitech-business-section-in-2026.html [3] https://www.reuters.com/business/autos-transportation/continental-to-spin-off-automotive-business-sell-contech-2021-05-20/ [4] https://www.reuters.com/business/autos-transportation/continental-to-spin-off-automotive-business-sell-contech-2021-05-20/ [5] https://www.reuters.com/business/thyssenkrupp-to-discuss-marine-subsidiary-tkms-independence-extraordinary-general-meeting-2021-05-18/ [6] https://www.continental-corporation.com/en-en/press-releases/continental-to-spin-off-automotive-business-sell-contech-2021-05-20.html [7] https://www.reuters.com/business/autos-transportation/continental-to-spin-off-automotive-business-sell-contech-2021-05-20/ [8] https://www.commerzbank.com/en/investor-relations/calendar-of-events.html
The spin-off of the Automotive division, to be named Aumovio, will focus on the Automotive and Contract Manufacturing sectors, with the intention of improving operational agility. This independent company will have an IPO or Capital Market Day event in 2025 to highlight its financial milestones.
The divestment of the ContiTech business, which focuses on industrial technology, is expected to take place in 2026. Potential buyers may secure the sale before the end of the year.
