Continental AG announced the sale of its ContiTech industrial unit to Lone Star Funds for an enterprise valuation of €4 billion, equivalent to approximately $4.6 billion. This divestment marks the final step in Continental's strategic realignment, transforming it into a pure-play tire manufacturer. The deal, which includes potential performance-based components of up to €250 million, is expected to generate cash proceeds of about €3.1 billion for Continental upon its anticipated closing by the end of the year.
ContiTech, a leading industrial specialist in material solutions, employs around 22,000 people globally and recorded sales of approximately €4.4 billion in fiscal year 2025. It provides a wide array of products including conveyor belts, air springs, and fluid management solutions for industries such as mining, energy, and automotive. Lone Star Funds, a private equity firm with significant experience in the industrial sector, expressed confidence in ContiTech's growth potential and plans to further develop the business through operational improvements and targeted investments.
Continental plans to distribute approximately €2.5 billion from the sale proceeds to its shareholders, either through a special dividend or a combination of a special dividend and share buybacks. The company also aims to strengthen its capital structure. This sale follows previous strategic moves including the spin-off of its former Automotive group sector (now Aumovio) in September 2025 and the sale of ContiTech's Original Equipment Solutions business in February 2026. The transaction is subject to regulatory approval, particularly from antitrust authorities.
Financial analysts from Citi noted that the deal price supports a potential increase in Continental shares towards the €80 level. The outlook for Continental's core tires business, which has shown stable development and strong performance in premium segments, remains unaffected. In 2025, passenger-car tires accounted for 77% of its tire sales, with 76% of global sales coming from replacement tires, and a significant portion from ultra-high-performance tires (18 inches and larger).
Continental's CEO, Christian Kötz, stated that this sale not only concludes their strategic realignment but also ushers in a new era as a focused tire manufacturer. Donald Quintin, CEO of Lone Star Funds, highlighted ContiTech's strong technological capabilities and market leadership, emphasizing their intent to work with management to pursue growth in attractive markets.
