Conti Looks for Software Acquisitions

Continental AG may spend as much as €5 billion ($5.7 billion) to buy one or more software companies following next year’s planned divestiture of its Powertrain division.

Chief Financial Officer Wolfgang Schaefer tells German’s Boersen-Zeitung that proceeds from the initial public stock offering, which was announced in July, could help finance one or more software acquisitions. The Powertrain IPO is on track for a mid-2019 flotation, according to the financial newspaper.

About one-third of Conti’s 47,000 engineers currently have a software or IT background. More than 60% of the supplier’s automotive products already are digitized or equipped with sensors. But the company aims to bolster its expertise in the area as most of its products become electronic.

Following the IPO, Conti plans to operate three business sectors: automotive, powertrain and rubber. The automotive unit will be renamed Continental Automotive and will consist of two divisions: Autonomous Driving Technologies (formerly Chassis & Safety) and Vehicle Networking Technologies (formerly Interiors).