Buyout firm Lone Star Funds has moved into pole position to acquire ContiTech, the industrial components division of Continental AG, according to a report by Bloomberg citing unnamed people familiar with the matter, as the German group advances its multi-year restructuring plan.
A transaction could be agreed as soon as later this month, provided negotiations progress as expected, although sources cautioned that discussions remain ongoing and no outcome is guaranteed. The process is still competitive, with alternative bidders continuing to evaluate the asset and Continental retaining the option to keep the business if terms are not satisfactory.
ContiTech manufactures a range of industrial products including conveyor belts, hoses and air springs, serving customers across automotive, manufacturing and broader industrial end-markets. The unit has been widely viewed as a non-core asset as Continental accelerates its separation strategy.
Earlier reports indicated that other private equity groups, including Platinum Equity and KPS Capital Partners, have also examined the opportunity as part of a broader auction process.
The potential sale represents the final major step in Continental’s plan to streamline its corporate structure and focus more tightly on core automotive technologies, at a time when European suppliers face persistent demand weakness and margin pressure.
Industrial carve-outs have become an increasingly active segment for private equity investors, with firms targeting assets that can be restructured or repositioned under new ownership. Sponsors have also been drawn to businesses perceived as resilient or adaptable in the face of automation and artificial intelligence-driven industrial change.
Recent comparable activity includes increased competition for automotive and industrial engineering assets across Europe, as well as heightened bidding for manufacturing businesses undergoing separation from larger conglomerates.
If completed, the deal would add to Lone Star’s established track record in acquiring and restructuring complex industrial assets across global markets, particularly in situations involving corporate divestments and portfolio simplification.
