Continental nears sale of Contitech division to Lone Star

German auto parts maker Continental is on the verge of selling its plastics technology division, Contitech, to the U.S. private equity firm Lone Star Funds. The deal, valued at roughly four billion euros ($4.3 billion), marks a significant step in Continental's strategic shift to concentrate on its core tire manufacturing operations.

Continental's executive and supervisory boards have approved the sale based on the agreed valuation. The agreement includes potential additional payments of up to 250 million euros, contingent on future performance. While a binding agreement has not yet been finalized, the market reacted positively to the news, with Continental's stock seeing a nearly two percent increase shortly after the announcement.

This divestment is part of Continental's broader restructuring plan. The company had previously spun off its automotive supplier division, Aerovio. By shedding Contitech, Continental aims to streamline its business and solidify its focus on the tire sector, signaling a clear direction for its future corporate strategy.