Goodyear Engineering Was Sale “Bad News” for Contitech

Following the news that Goodyear Tire & Rubber Co has sold its engineering products division to Carlyle group, Deutsche Bank analysts have reported that the sale would have been a good purchase for Contitech. It has been widely reported that Continental was interested in both Goodyear Engineering products and Siemens VDO.

“In our view, the sale of Goodyear Engineering products to Carlyle is bad news for Continental, unless the group is saving all its financial resources for Siemens VDO,” the analysts commented, adding: “We believe Goodyear Engineering products would have been a great fit for Contitech, Continental’s subsidiary which is currently very focused in Europe (90% of revenues). Contitech has a good track record with the successful acquisition of Phoenix, which has doubled its EBIT margin since 2004.”