Conti Pushes Powertrain IPO to 2020

Continental AG is delaying the planned spinoff of its powertrain unit from later this year to sometime in 2020, depending on market conditions.

Earlier this year Conti created a separate legal entity for the powertrain business and announced plans to rename the group Vitesco Technologies. The supplier had planned to issue a partial IPO, in which it retains control of the business, by mid-2019.

The delay was announced as part of Conti’s first quarter results. Sales were flat through the first three months of 2019 at €11.0 billion ($12.3 billion). But high investment spending and a drop in global vehicle production caused Conti’s adjusted operating income to fall 17% for the period to €884 million ($984 million).

Conti eventually will become a holding company for three business sectors: automotive, powertrain and rubber. The automotive operations will be renamed Continental Automotive next year, consisting of Autonomous Driving Technologies (currently Chassis & Safety) and Vehicle Networking Technologies (Interiors).