DGAP-Adhoc: Continental AG: Continental concludes Investment Agreement with Schaeffler

Continental AG / Agreement

21.08.2008 

Release of a Adhoc News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Continental Aktiengesellschaft, Hannover, ISIN DE0005439004 

On August 21, 2008, Continental AG entered into a far-reaching Investment
Agreement with Schaeffler KG, Mrs. Maria-Elisabeth Schaeffler and Mr. Georg
F.W. Schaeffler. With this agreement, the dispute regarding the public
takeover offer by the Frankish family owned business has been settled.
Former German Chancellor Dr. Gerhard Schröder has been won as a guarantor
for ensuring the interests of all stakeholders of Continental.

The open ended Investment Agreement, that cannot be terminated by the
parties before spring 2014, contains several provisions to safeguard the
interests of Continental AG and its shareholders, employees and customers. 
Schaeffler KG has committed itself to increase the offer price per
Continental share from EUR 70.12 to EUR 75.00 (this price resulting in a
premium of 39 % on the stock price per Continental share immediately prior
to announcement of the takeover bid).

In addition, Schaeffler has undertaken to limit its position to a minority
shareholding in Continental AG (up to 49.99 %) for a period of four years,
to support the ongoing strategy and business policies of Continental AG's
executive board while maintaining its current market and brand appearance
and to not demand a sale of activities or other material structural
measures.

A further material element of the agreement directed at safeguarding the
interests of Continental AG is the obligation of Schaeffler to compensate
Continental AG for possible negative effects resulting form a so called
change-of-control in connection with existing financing agreements of
Continental AG and negative tax effects resulting from Schaeffler's
shareholding in the amount of overall 522 mn Euro.

Schaeffler KG further has accepted to give, in case of a possible sale of
blocks of its minority stake in Continental within the next four years, a
pre-emptive right to a person nominated by the guarantor, if the sale to
such person is in the best interest of Continental AG and Schaeffler KG. In
addition, it has been agreed that there will be no changes to Continental
AG’s form of incorporation, its corporate seat, headquarters or business
divisions, its listing on the stock exchange, its dividend policy or an
increase of its debt to equity ratio against the wishes of Continental AG.

To safeguard the interests of the employees, Schaeffler KG is obliged not
to conduct or support, without the consent of Continental’s executive
board, any measures directed at changing the current collective bargaining
or works council agreements or abolishing the employees’ codetermination
rights based on parity in the supervisory board. In addition, Schaeffler is
obliged to respect all rights of the employees, works councils and the
labour unions under applicable law, agreements, regulations and contracts
in force at Continental.

In addition, without undue delay after completion of the takeover offer
both parties will examine the possibilities for strategic cooperation
projects between the Schaeffler Group and the Continental Group
particularly in the Powertrain division based on the principles of an
alliance of equals between two productive and independent companies.

As a guarantor for ensuring the interests of Continental, its shareholders,
its employees and other stakeholders, former German Chancellor Dr. Gerhard
Schröder is authorized and empowered to enforce all obligations of
Schaeffler at any time by legal action or out of court. In this regard he
is entitled to request information from Schaeffler about their level of
compliance with their obligations under the Investment Agreement.

Once the offer document has been amended by Schaeffler, the executive board
and the supervisory board shall issue an additional statement pursuant to
Sect. 27 of the Securities Acquisition and Takeover Act (WpÜG).
DGAP 21.08.2008 
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Language:     English
Issuer:       Continental AG
              Vahrenwalder Straße 9
              30165 Hannover
              Deutschland
Phone:        +49 (0)511 938-1068
Fax:          +49 (0)511 938-1080
E-mail:       ir@conti.de
Internet:     www.conti.de
ISIN:         DE0005439004
WKN:          543900
Indices:      DAX
Listed:       Regulierter Markt in Berlin, Frankfurt (Prime Standard),
              Hannover, Hamburg, Luxembourg, Stuttgart; Freiverkehr in
              München, Düsseldorf; Terminbörse EUREX; Foreign Exchange(s)
              SWX, Wien
End of News                                     DGAP News-Service
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