MUNICH -- CEO Manfred Wennemer will quit Continental AG after the German supplier's supervisory board agreed to allow Schaeffler Group to take a strategic stake in Continental.
Continental said Wennemer asked the supervisory board to be released from his responsibilities by August 31.
"The supervisory board has agreed to this request with great respect for Wennemer's achievements. His successor will be appointed in the immediate future," Continental said in a statement
Wennemer opposed Schaeffler's involvement in Continental. He said that the tactics Schaeffler used to acquire a 36 percent stake in the company between March and July were "high-handed and irresponsible."
Schaeffler has agreed with Continental's supervisory board to buy a stake in Continental of up to 49.99 percent for 75 euros a share. Schaeffler already directly or indirectly owns 36 percent of Continental.
Wennemer, 60, has been of Continental CEO since September 2001. Under his leadership, Continental developed to one of the most successful automotive suppliers in the world.
Schaeffler has committed itself to keeping its holding in Continental below 50 percent for at least four years, Continental said.
Shareholders will "most likely" have until September 16 to decide on the offer, the company added.
Schaeffler pledged to support Continental's current strategy and to leave its brand appearance and organizational structure untouched.
Former German Chancellor Gerhard Schroeder will serve as guarantor of the agreement, ensuring "the interests of all stakeholders of Continental."
Should Schaeffler decide to sell "blocks" of its minority stake within the next four years, it will hand the right of first refusal to a person nominated by Schroeder, according to the deal.
In addition, there will be no changes to Continental's form of incorporation, 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," the company said.
Both parties plan to look into cooperation projects particularly in the powertrain division "based on the principles of an alliance of equals," Continental said.
Schaeffler CEO Juergen Geissinger said the deal opened the way for the two German suppliers to combine to develop innovative solutions for future challenges in the automotive industry.
"We have striven from the beginning for a constructive agreement in the interests of both companies, their workers, customers and shareholders," he said in a statement.