Conti Ponders Total Spin Off Powertrain Division

Continental AG’s executive board says it may completely spin off its Powertrain unit under the Vitesco Technologies name rather than float a partial initial public offering for the business.

The board says it will study both options. But it notes that a possible total spinoff would give the Conti more maneuverability, especially given uncertain conditions for an IPO next year.

Conti delayed taking action on a partial stock offering for the business early this year after reporting flat sales and a 17% drop in adjusted operating income. The company announced a year ago that it intended to restructure itself as a holding company with separate rubber, automotive and powertrain divisions.

CEO Elmar Degenhart says the unit is well positioned for fast growth in electronics and powertrain electrification. He also affirms that current employment guarantees for members of the Powertrain unit through 2023 will remain in force, regardless of which option the board chooses.