Car Parts Listing

Schaeffler IPO Could Be Germany's Biggest

Schaefflers dpa
The IPO will mean Georg Schaeffler and his mother, Maria-Elisabeth Schaeffler-Thumann, will relinquish some of their power at the family's auto supplier.
  • Why it matters

    Why it matters

    A successful share sale could enable car parts maker Schaeffler to fully emerge from a failed, debt-funded takeover of rival Continental in 2008.

  • Facts

    Facts

    • The company was founded by the Schaeffler brothers in 1946. In 1964, it expanded to the United States.
    • It still owns 46 percent of Continental, a tire and car-parts giant, and competes with Bosch of Germany, Canadian-Austrian firm Magna and Japan’s Denso.
    • Maria-Elisabeth Schaeffler-Thumann and her son Georg F.W. Schaeffler currently own Schaeffler.
  • Audio

    Audio

  • Pdf

Schaeffler, the family-owned German maker of ball bearings and car parts, is planning to sell shares worth up to a quarter of its value in what could become the biggest German IPO this year.

The listing, scheduled for October 5, will see existing and new shares equivalent to 25 percent of its capital floated on the Frankfurt Stock Exchange, the company said in a statement on Monday.

Schaeffler, which supplies carmakers such as GM, said it wants to use the money to pay down debt. The firm and its parent company Schaeffler Holding took on billions of euros of loans in 2008 in an attempt to buy rival Continental. The deal failed due to the financial crisis, but Schaeffler still owns 46 percent of Continental.

The share sale could fetch as much €3 billion, or $3.4 billion, Bloomberg reported, citing people familiar with the matter. Reuters also reported the initial public offering could surpass the share listing of Covestro, the spin-off of Bayer’s materials division.

“Schaeffler wants to use the favorable capital market conditions, which may not last much longer.”

Daniel Saurenz, Analyst, Feingold Research

Covestro said on Friday it aimed to rise about €2.5 billion in a listing planned for October 2. If Schaefller’s IPO tops that of Covestro, it will be the biggest in Germany this year.

Germany’s biggest stock listing so far this year was the €1.2-billion IPO in July of Deutsche Pfandbriefbank, a real estate and public investment lender, according to information from German stock market operator Deutsche Börse.

“Schaeffler wants to use the favorable capital market conditions, which may not last much longer,” said Daniel Saurenz, an analyst at Frankfurt-based finance consultancy Feingold Research.

Scout24, an online classifieds German Internet company, also plans its IPO later this year and said on Friday it could sell as much as €1.06 billion worth of shares.

Deutsche Wohnen, Germany’s second-largest residential property owner, announced on Sunday its intention to buy rival LEG in an all-share transaction worth €4.6 billion euros.

“The number of mergers and acquisitions has also been increasing,” Mr. Saurenz told Handelsblatt Global Edition.

 

108 Schaeffler-01

 

Schaeffler was founded in 1946 and is owned by Maria-Elisabeth Schaeffler-Thumann and her son Georg F.W. Schaeffler. Last year, it made a net profit of €654 million on sales of €12.1 billion. It had 82,300 employees at the end of 2014.

Schaeffler had €6.2 billion in debt at the end of June. Schaeffler Holding said it would rearrange €3.6 billion worth of loans, by reducing the debt level and refinancing loans.

The IPO announcement came a day after Schaeffler said first half revenue grew 12 percent to €6.7 billion, but that it would be cutting about 500 jobs, mainly in Europe, at its industrial products divison, which accounts for a quarter of total revenue.

“The decision comes in reaction to the stagnating development of the industrial division in recent years,” the firm said.

 


Video: Schaeffler at the Frankfurt International Motor Show 2015.

 

Gilbert Kreijger is an editor at Handelsblatt Global Edition in Berlin, focusing on companies and markets. To contact the author: kreijger@handelsblatt.com

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