Continental, the German automotive parts manufacturer, announced Saturday that it has reached an agreement to sell its ContiTech division — which produces rubber and plastic products — to private equity firm Lone Star Funds for €4 billion, or approximately $4.57 billion. The deal also includes the possibility of additional performance-based payments of up to €250 million in future years.
After standard financial adjustments, Continental anticipates receiving roughly €3.1 billion in cash from the transaction. Of that amount, the company plans to distribute approximately €2.5 billion back to its shareholders once the deal is finalized.
Company officials said the divestiture will allow Continental to sharpen its focus on its core tires business, which the company confirmed will not be affected by the sale.
Continental is still evaluating what impact the transaction may have on its financial outlook for the current fiscal year.
The ContiTech division has faced significant headwinds in recent months. In May, the unit eliminated 3,000 positions — including 1,600 jobs in Germany — as part of broader cost-cutting efforts. Continental had previously set a goal of saving €150 million per year by 2028 through reductions at ContiTech.
Reuters had reported on Friday, citing sources familiar with the matter, that the two companies were close to finalizing a deal for ContiTech, which manufactures rubber and plastic components primarily for industrial customers. The sale is expected to be completed by the end of 2026.
