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Schaeffler-Continental Merger Slowed on Taxes, Handelsblatt Says

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Nov. 1 (Bloomberg) -- The planned merger of Continental AG and Schaeffler Group may be delayed by several years or fail altogether because of U.S. tax demands, Handelsblatt reported, citing unidentified people close to Schaeffler.

The U.S. wants to tax Georg Schaeffler, who lives in the country and owns 80 percent of the namesake German manufacturer, for $400 million generated through a reorganization of the company, the newspaper said, citing unidentified people close to the companies. Schaeffler Group has agreed to pay the resulting levy, Handelsblatt said.

The car-component makers could face as much as $1.5 billion in additional U.S. taxes for their merger, the German newspaper said, citing unidentified people familiar with the matter. People close to the companies disputed that and said any figure has yet to be set, Handelsblatt reported.

Marcus Brans, a Schaeffler spokesman, wasn’t available for comment when Bloomberg called the Herzogenaurach-based company outside of normal working hours. Hannes Boekhoff, a spokesman for Hanover, Germany-based Continental, declined to comment.

To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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