May 13 (Bloomberg) -- Schaeffler AG, Continental AG’s largest investor, plans to end an agreement between the two makers of auto parts as it continues to dismantle a plan for a gradual merger.
Continental is “confident that the two companies will continue their very good and goal-oriented cooperation on into the future” following the termination of the shareholding accord in mid-May 2014, Chief Executive Officer Elmar Degenhart said today in an e-mailed statement.
Family-owned Schaeffler, which makes industrial bearings and transmission components, agreed in August 2008 to temporarily limit its stake in Hanover-based Continental to 49.99 percent in a deal to resolve a dispute over control of the tire producer, which is also Europe’s second-biggest car-parts manufacturer.
Debt ballooned to about 12 billion euros ($15.6 billion) at Herzogenaurach, Germany-based Schaeffler after the efforts to limit its holding in Continental backfired amid the global recession, when more shareholders than it was expecting accepted its offer to buy stock. Schaeffler parked the excess Continental shares at banks and scaled back the stake to 49.9 percent in September 2012. At one point, its direct and indirect holding totaled 90 percent.
“The investment agreement no longer has any practical relevance for either company since key provisions of the agreement expired in August 2012,” Schaeffler said in a separate statement.
Continental and its biggest investor are cooperating on about 30 projects, Degenhart said earlier this year.
“We consider our investment in Continental a long-term strategic investment aimed at sustainably increasing the value of Continental,” Maria-Elisabeth Schaeffler and Georg F.W. Schaeffler, the bearing maker’s owners, said in the statement.
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