Continental sells ContiTech to Lone Star in €4 billion deal
Continental agreed to sell ContiTech to Lone Star for €4 billion, a move that leaves the German supplier on track to become a pure tire maker.
Continental agreed to sell its ContiTech plastics and rubber business to Lone Star Funds for €4 billion, plus performance-based payments of up to €250 million. The deal marks one of the most consequential moves yet in Continental’s restructuring and removes a major industrial unit from a company built around auto supply, tires and engineered materials.
The Hanover-based group said the transaction is the final step in its realignment and will make Continental a pure-play tire manufacturer for the first time in its history. Continental expects cash proceeds of about €3.1 billion after adjustments, a sum that gives the company fresh room to cut debt, return capital or invest more heavily in the tire business as Europe’s auto supply chain keeps being reshaped by electrification and weaker margins.
The sale did not come out of nowhere. Continental confirmed plans to sell ContiTech at a capital market day in Frankfurt in June 2025, then said on Aug. 27, 2025 that a sale was the most probable strategic option and that ContiTech could become independent during 2026. Since then, Continental has stripped away other pieces of the old structure: it completed the spin-off of its former Automotive and Contract Manufacturing businesses into Aumovio on Sept. 17, 2025, and sold ContiTech’s Original Equipment Solutions business to Regent on Feb. 2, 2026.
The timing also reflects pressure on the business itself. Continental’s annual report showed ContiTech sales fell 6.0% year-on-year to €6.005 billion in 2025. Continental said on March 4, 2026 that it expected higher earnings in 2026 and that the positive effects of earnings-improvement measures would come particularly from ContiTech, signaling that the unit still had value but also needed more operational work than a simplified tire group may want to carry. For investors, the sale clarifies the story and unlocks cash. For workers and customers, it raises the prospect of further restructuring under private equity ownership.
Lone Star brings a familiar playbook. The firm says it has organized 26 funds with aggregate capital commitments of about $96 billion since 1995, and it recently expanded in industrial materials with acquisitions including DOMO Engineered Materials and RadiciGroup businesses. ContiTech says it operates in more than 40 countries across off-highway, rail, road, air, underground and industrial applications, so the transaction reaches far beyond one corporate balance sheet and into a wide network of suppliers, plants and customers watching how legacy manufacturers adapt to the EV transition.
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