HANNOVER (dpa-AFX) - After months of review, tire manufacturer and automotive supplier Continental has decided to divest its weakening automotive division. The automotive division, which includes electronics, brakes and interior fittings, is to be sold via a so-called pure spin-off on the stock exchange, as the Conti Executive Board headed by Nikolai Setzer decided on Monday. The Hanover-based company had announced in August that it was considering this step and thus splitting up the Group. The Supervisory Board and Annual General Meeting still have to approve the plan next year. The spin-off should then be completed by the end of 2025.

In recent years, Conti had repeatedly been in the red even before the current weak industry situation in the cyclical supplier business for car manufacturers. A rigorous cost-cutting program is currently underway, which aims to reduce annual costs by 400 million euros from next year. To this end, Conti is cutting around 5,400 jobs in administration. In addition, savings are also being made in research and development - a total of 7,150 jobs will be lost. This is intended to bring the division safely back into the profit zone so that it can stand on its own two feet and become attractive to investors.

In a pure spin-off, shareholders simply receive new shares in the part to be spun off and can then decide whether they want to stay in or sell shares. The Conti Group does not receive any money from such a process. Years ago, Conti spun off its powertrain business to the company Vitesco and also floated it on the stock exchange by means of a spin-off. In the meantime, the Regensburg-based company has slipped under the umbrella of the automotive and industrial supplier Schaeffler.

Of the almost 195,000 employees in the Conti Group at the end of September, almost 96,400 were still employed in the automotive supplier division. This division is the largest in the DAX-listed group, but the lucrative tire business generates the lion's share of profits.

The Executive Board's plans are to be presented to the Supervisory Board in March 2025, after which an Annual General Meeting must give its final approval on April 25. "A lean, focused holding structure is to be created by the end of 2025," said Conti CEO Nikolai Setzer, according to a press release./men/mne/nas