Continental AG intends to sell off most of its ContiTech unit in order to fund acquisitions of businesses central to the German supplier's chassis focus.
Continental will retain ContiTech's air spring systems and vibration control divisions, which had 2000 sales of about $280 million and a work force of 2,700.
Continental will seek a buyer for the remaining ContiTech businesses, which have annual sales of $1.26 billion. They include the sealing systems, fluid-handling systems, transmission, conveyor belt systems, elastomer coatings and Benecke-Kaliko divisions. The company already is negotiating with potential suitors, it said.
Company officials said the sale will allow Continental to concentrate all of its resources on the core chassis business, and provide the money to fund acquisitions in expanding automotive fields such as vehicle electronics and electric steering and damping systems.
Continental Chairman Stephan Kessel especially covets an electronics acquisition to help integrate the braking, tire and suspensions systems that the company already makes.
Continental's first move may be the purchase of all or part of DaimlerChrysler AG's Temic Automotive electronics unit.
The two companies are negotiating a deal, sources say, and an agreement should be final this spring.
Continental also has looked at German suspension supplier Sachs Automotive, according to published reports and European financial sources.