By Lily Bearings
©2004-2008
Schaeffler Group, the ball-bearing maker strained by 11 billion euros ($14 billion) in debt from buying Continental AG, said combining the companies¡¯ car-parts businesses may take months to complete.
¡¡ãWe will continue to work on the merger of both automotive operations,¡¡À Detlef Sieverdingbeck, a spokesman for Herzogenaurach, Germany-based Schaeffler, said in an e-mailed response to questions. ¡¡ãBut it is certainly not a process that can be completed in the coming months.¡¡À
Schaeffler controls 90.2 percent of Hanover, Germany-based Continental, Europe¡¯s second-biggest car-parts supplier, after a takeover completed earlier this year. Handelsblatt newspaper, citing unidentified people familiar with the situation, reported yesterday that the merger of Continental¡¯s and Schaeffler¡¯s auto- components units could be delayed for years.
The ball-bearing manufacturer is working on a reorganization plan in agreement with its banks in hopes of securing German government aid as it seeks 5 billion to 6 billion euros in fresh capital. The company, owned by the founder¡¯s widow, Maria- Elisabeth Schaeffler, and their son, Georg, aimed to combine the two auto-parts businesses to cut costs.
The company¡¯s troubles have piled up since its initial July 15 hostile bid for Continental, which is also Europe¡¯s second- biggest tiremaker and generates three times as much revenue as the family-owned company. Under an agreement reached in August, Schaeffler agreed to limit its direct stake in Continental to 49.9 percent for four years and has shifted the other 40.3 percent to banks.