Bankers Prep €2.5 Billion Debt as ContiTech Unit Sale Kicks Off
(Bloomberg) — Bankers are working on a debt package of about 2.5 billion euros ($2.9 billion) to support the potential acquisition of Continental AG’s industrial ContiTech unit as the highly anticipated sale process gets underway.
Information notes on the sale, led by Deutsche Bank AG and Perella Weinberg Partners, were published last week, according to people familiar with the deal who asked not to be named because the matter is private. Potential buyers are expected to submit first round bids at the auction next month, the sources added.
Sources said sales of the unit, which produces products such as conveyor belt systems and agricultural hoses, are expected to reach a figure of approximately 4 to 5 billion euros.
ContiTech’s launch marks the second multi-billion-euro industrial expansion in Germany this year as major companies focus on core operations. Automaker Volkswagen AG recently began selling a majority stake in its heavy diesel engine unit Everllence SE, which could fetch more than €5 billion, Bloomberg previously reported.
According to sources, EQT AB, CVC Capital Partners Plc, EQT AB, KPS Capital Partners and Blackstone Inc. Private equity suitors such as can look at both assets before deciding which one to pursue. Some suitors might prefer the ability to buy all of ContiTech over a large stake in Everllence, some said.
M&A activity is picking up again this year following a strong finish to 2025. Leveraged finance bankers looking to take a cut at some of the most lucrative fees in investment banking are vying for a role in the billions of dollars in financing backing these deals, which are scheduled to begin on both sides of the Atlantic in the next few months.
According to sources, bankers working on the sale of ContiTech began creating debt packages worth approximately €2.5 billion; This equates to approximately 4.25 times the unit’s earnings before interest, tax, depreciation and amortization of approximately 600 million euros.
Financing could come in the form of leveraged loans and high-yield bonds denominated in euros and dollars, they added.
Last month, Bloomberg reported that Continental’s ContiTech unit would miss targets due to weak demand and other expenses, raising doubts about the price the division would receive.
A Continental spokesman confirmed the sales process would begin this month but declined to comment on financing. A representative for Perella declined to comment. Deutsche Bank did not immediately respond to a request for comment.
The offloading of ContiTech is the latest step in the German tire maker’s breakup plan, which also includes listing its auto parts business Aumovio SE.
–With help from Eyk Henning.
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