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Schaeffler takes control of 49.9 percent of Continental
Privately held bearings maker Schaeffler gained control of larger auto parts rival Continental on Thursday, when it collected the bulk of shares tendered after its 11.3 billion euro ($15.4 billion) bid.
The acrimonious takeover was finally concluded after Schaeffler disbursed to depository banks 75 euros per Continental share to raise its stake to 49.90 percent from a last reported 15.2 percent.
In view of the economic recession and a global crisis in the auto industry, Schaeffler Chief Executive Juergen Geissinger wanted to clear the way to integrate the companies quickly and pragmatically.
'Both companies are facing great challenges and have no time to lose,' he said in a statement.
Under an agreement struck in late August with Continental's management, the excess shares tendered to Schaeffler were 'transferred' to unnamed financial institutions, which are expected to end up with about 40 percent of Continental.
On December 22, Germany's Metzler Bank and Sal. Oppenheim bought stakes of 4 percent and 5.5 percent, respectively, triggering disclosure thresholds mandated under German securities law.
Analyst Christian Mueller of IHS Global Insight said he thought Schaeffler was forced to sell the stock to these financial institutions at a loss.
'I can imagine that Schaeffler agreed with interested parties on a price between 40-50 euros,' he said.
FEARS BID WOULD COLLAPSE
Schaeffler said depository banks would now credit its payments of 75 euros per share to investors' accounts.
Only a few months ago, many investors were beginning to doubt whether the deal would ever go through.
The collapse of U.S. investment bank Lehman Brothers only days after the agreement between Schaeffler and Continental was reached sent shares in the latter diving, while a severe deterioration in credit markets triggered fears that syndicating banks would try to renege on their 16 billion euro loan commitments.
A lengthy process to submit documents for European Union antitrust approval raised suspicions that Schaeffler was dragging its feet and looking for an excuse to call the deal off -- speculation Schaeffler repeatedly denied.
Even the tone between the two companies became hostile, after Continental Chief Executive Karl-Thomas Neumann said in December that attempts by its new shareholder to intervene in its debt restructuring talks were a 'massive encroachment' that 'clearly goes against the spirit' of their agreement.
Combined with a sharp slump in the automotive industry, the price of shares tendered fell to 50.5 euros at one point.
The acrimonious takeover was finally concluded after Schaeffler disbursed to depository banks 75 euros per Continental share to raise its stake to 49.90 percent from a last reported 15.2 percent.
In view of the economic recession and a global crisis in the auto industry, Schaeffler Chief Executive Juergen Geissinger wanted to clear the way to integrate the companies quickly and pragmatically.
'Both companies are facing great challenges and have no time to lose,' he said in a statement.
Under an agreement struck in late August with Continental's management, the excess shares tendered to Schaeffler were 'transferred' to unnamed financial institutions, which are expected to end up with about 40 percent of Continental.
On December 22, Germany's Metzler Bank and Sal. Oppenheim bought stakes of 4 percent and 5.5 percent, respectively, triggering disclosure thresholds mandated under German securities law.
Analyst Christian Mueller of IHS Global Insight said he thought Schaeffler was forced to sell the stock to these financial institutions at a loss.
'I can imagine that Schaeffler agreed with interested parties on a price between 40-50 euros,' he said.
FEARS BID WOULD COLLAPSE
Schaeffler said depository banks would now credit its payments of 75 euros per share to investors' accounts.
Only a few months ago, many investors were beginning to doubt whether the deal would ever go through.
The collapse of U.S. investment bank Lehman Brothers only days after the agreement between Schaeffler and Continental was reached sent shares in the latter diving, while a severe deterioration in credit markets triggered fears that syndicating banks would try to renege on their 16 billion euro loan commitments.
A lengthy process to submit documents for European Union antitrust approval raised suspicions that Schaeffler was dragging its feet and looking for an excuse to call the deal off -- speculation Schaeffler repeatedly denied.
Even the tone between the two companies became hostile, after Continental Chief Executive Karl-Thomas Neumann said in December that attempts by its new shareholder to intervene in its debt restructuring talks were a 'massive encroachment' that 'clearly goes against the spirit' of their agreement.
Combined with a sharp slump in the automotive industry, the price of shares tendered fell to 50.5 euros at one point.
