Continental Sells ContiTech to Lone Star Funds for €4 Billion

German automotive giant Continental AG has signed an agreement to sell its ContiTech plastics and rubber business to private equity firm Lone Star Funds for €4 billion. The deal also includes potential performance-based components of up to €250 million in subsequent years. This strategic move represents the final phase of Continental's multi-year restructuring process, enabling the company to focus on its core tires business.

According to a statement from Continental, the company expects net cash proceeds of approximately €3.1 billion from this sale, after customary adjustments. The transaction is expected to be completed by the end of 2026 and is subject to regulatory approvals. Continental plans to distribute approximately €2.5 billion of the proceeds to its shareholders through a special dividend or a combination of a special dividend and share buybacks. The remaining amount will be used to strengthen the company's capital structure.

ContiTech is known as a leading industrial specialist with approximately 22,000 employees worldwide. The division generated sales of around €4.4 billion in fiscal year 2025, with approximately 80 percent of this revenue coming from industrial solutions. ContiTech supplies rubber and thermoplastic products and systems to various sectors, including mining, energy, construction, and manufacturing.

This sale is part of Continental's broader portfolio optimization efforts in recent years. The company had previously spun off its former Automotive group sector as Aumovio, listed on the Frankfurt Stock Exchange in September 2025, and sold ContiTech's former Original Equipment Solutions business area in February 2026. With this latest transaction, Continental will become a company focused solely on tire manufacturing for the first time in its history.

Market analysts suggest that this agreement could positively impact Continental's stock performance. Citi analysts noted that the deal price supports a move in Continental shares towards the €80 level. While the company is assessing the transaction's impact on its current fiscal year outlook, the outlook for its tires business remains unaffected. ContiTech, which had been under pressure, cut 3,000 jobs in May as part of a cost-saving plan.

Lone Star Funds, headquartered in London, UK, is a leading investment firm that advises funds investing globally in private equity, credit, and real estate. Known for its extensive experience in the industrial sector, Lone Star has expressed confidence in ContiTech's growth potential and aims to further develop the business through operational improvements and targeted investments in attractive growth markets.