Continental AG on Sept. 2 said it is considering spinning off its powertrain division on top of a potential partial listing in 2020.
The German automotive parts producer said a spinoff will give the company some breathing room given the rapid shift towards powertrain electrification and the unforeseeable conditions surrounding a potential partial IPO next year.
"This approach ensures that our powertrain business will be able to embark on its promising course under the best possible conditions in 2020 – regardless of whether it does so via a partial IPO or a spinoff," Continental CEO Elmar Degenhart said in a statement.
Degenhart also said that the company's employment guarantee would continue to apply to the powertrain business through 2023 regardless of any changes to the company.
Andreas Wolf, powertrain division head at Continental, said that the partial IPO has so far been the preferred option of many, but added that the review of a spinoff gives the company a further option to ensure that the powertrain unit has the "best possible starting position" in 2020.
The powertrain segment is expected to be renamed Vitesco Technologies in the future, according to the release.
In July, Continental announced a new holding structure which will see three business segments — Continental Rubber, Continental Automotive and Powertrain — operating under the Continental Group umbrella brand.
