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25th August, 2008
BERLIN: Her firm’s tactics were slammed as “egotistical, autocratic and irresponsible” but that was never going to stop Maria-Elisabeth Schaeffler from becoming Germany’s new auto parts queen.
This week, the 67-year-old billionaire blonde finally won control of Continental in a deal creating one of the world’s biggest components makers.
Combined, the two firms have sales of 35 billion euros (52 billion dollars) and 215,000 employees, rivalling Bosch and Japan’s Denso, and selling everything from hydraulic brakes to ball bearings.
Schaeffler Group began in 1946 as INA, a company founded by the two brothers Georg and Wilhelm Schaeffler after fleeing Silesia in what is now Poland at the end of World War II.
It started out making wooden hand-carts but by the time Georg met Maria-Elisabeth Kurssa in the mid-1960s, INA was making ball bearings and related items not just in Germany but also in California, France and Brazil.
Twenty-four years his junior, Georg Schaeffler’s bride was born in 1941 in Prague, moving at the age of three to Vienna where she grew up in a bourgeois, conservative and Catholic milieu.
In her teens there was talk she wanted to become a nun but this was forgotten as she began studying medicine which she abandoned to move with her new husband to the Bavarian town of Herzogenaurach.
Georg died in 1996 and his widow inherited the firm together with their only son Georg, plus a fortune worth a place on the Forbes rich list and making her Germany’s second wealthiest woman.
She did not sit still. In the 12 years since, the firm has made a string of audacious deals that have catapulted it into the global big league.
From INA headquarters in Herzogenaurach, also home to sportswear giants Puma and Adidas, the firm’s first major acquisition was of clutch maker LuK in 1999.
Two years later came an unprecedented hostile takeover offer for listed and much larger rival FAG Kugelfischer.
It worked and the new combine became the world’s second biggest maker of rolling bearings, renaming itself the Schaeffler Group in 2003.
If buying FAG was a coup, then engineering the takeover this month of Continental—three times its size—was the icing on the cake.
Conti, as it calls itself for short, perhaps bit off more that it could chew in 2007 when it borrowed heavily to pay 11.4 billion euros for VDO, the auto parts division of Munich giant Siemens.
Saddled with debt, Conti shares tumbled by half, making it a considerably cheaper takeover target for any hungry predator—Schaeffler saw its chance and in July launched its unsolicited and at the time unwelcome bid.
Continental said the offer was “highly opportunistic, does not come close to the true value of Continental, does not create trust and lacks a convincing strategic rationale.
“Schaeffler would benefit from Continental but Continental not from Schaeffler,” it thundered at the time, with chief executive Manfred Wennemer dubbing its tactics “egotistical, autocratic and irresponsible.”
On reflection, however, it became clear that the tyre maker would rather go down the aisle with Schaeffler than be gobbled up and possibly broken apart by someone else.
A different buyer, possibly from abroad, would undoubtedly be less accommodating to the wishes of the 137-year-old firm and not so respectful of the niceties of German labour relations.
So Schaeffler upped its price, agreed to certain conditions and for the first time, a family-owned firm bouge involvement.
But he adds: “She is the owner of the company so that means that she is the heart of the company … She is the one making the decisions and I would expect she is very interested in all details of the business.
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