Germany’s two largest car parts suppliers seem to be heading for a showdown. It recently became public that Continental’s banks want to stop merger talks with Schaeffler in order to gain more control of the company through a capital increase. The move is seen as an assault on Conti’s majority shareholder, Schaeffler, which acquired a stake of more than 90 % in its larger rival a year ago. In the case of a capital increase, Schaeffler’s share could be cut back to 60 %.

Analysts have urged Conti to strengthen its debt-saddled balance sheet and voiced skepticism that the company would be able to pay back the portion of the debt due to mature next year.
In the meantime, the Schaeffler family is in danger of losing ownership of the Schaeffler Company to its banks due to the company’s debt load of EUR 11 billion (approx. USD 14.5 billion) which it amassed during the takeover process.