Schaeffler Group, an automotive supplier, has found Continental AG’s rejection of its offer “incomprehensible”.

Two internationally-leading automotive suppliers are currently in heated discussions following Continental AG’s rejection of a takeover bid from the Schaeffler Group, in which the company branded the offer as “opportunistic” and lacking “convincing strategic rationale”.

On 15 July, the Schaeffler Group announced a takeover offer to all shareholders of Continental AG of €69.37 per share and sought to acquire a strategic shareholding of more than 30% in the company.

The Executive Board of Continental AG rejected the offer because it did not represent the full value of the Company, and also rejected Schaeffler’s statement that such an agreement would be mutually beneficial because the two companies “fit each other well”. Continental AG said in a statement: “The strategic benefits of a closer collaboration of both companies are very limited. Schaeffler would benefit from Continental, but Continental not from Schaeffler. Continental has an outstanding potential as a standalone company in its current form.”

Schaeffler Group has insisted that its offer is “based on sound business logic” and has vehemently denied that it has acted unlawfully in any way, as suggested by Continental. It has stated that if the transaction goes ahead, it will not break up Continental AG, which will remain as an independent company, and no jobs will be lost.

Both automotive suppliers are based in Germany. Continental AG supplies items such as brake systems, vehicle electronics and tyres, and employs 150,000 staff at 200 locations in 36 countries. Schaeffler Group, the smaller of the two companies, supplies the automotive, aerospace and industrial sectors, with approximately 66,000 employees at 180 locations in 50 countries.