Continental AG, the world's fourth-largest tiremaker, said it's still interested in purchasing Siemens AG's VDO automotive components division and is in talks with Siemens's management on a regular basis.
„A combination of VDO with our business would make a lot of sense for Continental, Siemens and customers,” CEO Manfred Wennemer told reporters in Munich today at an industry conference. „We talk with Siemens' management about the issue on a regular basis,” he said. A VDO transaction will depend on a decision by Munich-based Siemens, Wennemer said. Siemens, Europe's biggest engineering company, in January announced plans to hold an initial public offering for its VDO unit as part of an overhaul initiated by CE Klaus Kleinfeld. Continental expanded its automotive-electronics business last year with the purchase of Motorola Inc.'s car-electronics unit, helping the Hanover, Germany-based company maintain 12 consecutive years of revenue growth. The company has „sufficient funds” to finance the targeted acquisitions, Wennemer said today. Siemens's Kleinfeld has said the preferred solution for VDO was an IPO, though he did not rule out other options. Wennemer said today that Continental could also „imagine” buying a minority stake in VDO, although the company still would need to have the „industrial leadership” at the combined entity.
VDO may be worth between €6 billion ($7.87 billion) and €8 billion according to analysts, Wennemer said, adding that these valuations „seem to be realistic.” Siemens's spokeswoman Jessika Gallitz said via phone today that the company still aims to hold an IPO for its VDO unit. Siemens said in January it will retain majority control of VDO Automotive after the planned IPO. Siemens built VDO with the 2001 purchase of Atecs Mannesmann AG from Vodafone Group Plc. Siemens VDO, led by Wolfgang Dehen, is the world's largest maker of electronic systems that help deploy car air bags. The company's biggest customer is Volkswagen AG, Europe's largest carmaker. Continental is also still bidding for Goodyear Tire & Rubber Co.'s engineered products unit and Slovak rubber and machinery company Matador AS, Wennemer said today. Goodyear has said it expects to sell its Engineered Products unit during the H1 of this year. The unit, which makes hoses and conveyor belts, has been up for sale since September 2005. (Bloomberg)