Continental Sees Synergies from VDO Takeover Above $250 Million a Year

Continental AG expects synergies from its takeover of Siemens AG’s VDO unit to exceed the previously announced $250 million per year from 2010, chief executive Manfred Wennemer said in an interview with Frankfurter Allgemeine Sonntagszeitung. He said Continental aims to improve VDO's yield to 10 to 12 percent by 2010, up from 6 percent currently.

From AFX News Limited

FRANKFURT — Continental AG expects synergies from its takeover of Siemens AG’s VDO unit to exceed the previously announced $250 million per year from 2010, chief executive Manfred Wennemer said in an interview with Frankfurter Allgemeine Sonntagszeitung.

He said Continental aims to improve VDO’s yield to 10 to 12 percent by 2010, up from 6 percent currently.

"If this (improvement) would take longer than until 2010 it would be a disappointment," he said.

Wennemer stressed that the new group’s sole headquarters will be in Hannover, Germany, where Continental is based.

Asked about possible job cuts at VDO, the CEO said Continental will announce in two to three months what its plans are.

Continental agreed to acquire Siemens’ VDO unit in July for approximately $16.8 billion.