In an effort to help the company expand into related industries, giant car manufacturer Continental announced over the weekend that they had purchased Konrad Hornschuch, a maker of fine upholstery, leathers, foams and films for cars and some other applications.
Since 2008, Hornschuch has been controlled by private equity firm Equistone and had sales of around $500 million last year.
The Weissbach-based company has nearly 2000 factory employees and operates plants in five sites in Germany and the U.S.
Hornschuch will be acquired by Continental‘s subsidiary Benecke-Kaliko and both sides have made it public that a contract was agreed and signed on Saturday.
Even so, the deal can only be finalized once it goes through a special regulatory commission to make sure the conditions are not in violation of current anti-trust laws.
Neither Hornschuch nor Continental were available for comment regarding the total value of the deal, but did disclose that completion of the agreement was likely to be reached around the middle of next year.
There may have been some Asian companies interested in Hornschuch, with Japan's Mitsubishi Chemical and South Korea's Daewon in the frame to make bids before Continental eventually snapped up the firm.
Continental executives released a statement saying that the acquisition “was a vital one for the company’s evolution and a logical next step in our expansion into other businesses.”
Shareholders have been saying for years that the company needed to branch out its business interests away from the car manufacturing sector in order to sustain growth.
“Expansion is hard to come by with an inflexible approach,” said Zheng Longwei, Chief Executive Officer at CTI China Renaissance, a Beijing-based investment firm who have a stake in Continental. “The board now sees that there are related industries the firm can move into with careful but bold moves in M&A.”
