Losing its bearings
An over-optimistic takeover falls victim to the recession
IT SEEMED to be the coup of the decade when Schaeffler, a family-owned German firm that makes bearings, triumphed in the hostile takeover of Continental, a car-parts firm three times its size. Schaeffler had not only displayed great stealth and cunning in sealing the deal. It also relied almost entirely on borrowed money, pulling itself up by its own bootstraps, as it were, to create one of the world's biggest car-parts suppliers. Now, however, a conquest that stunned corporate Germany last year for its audacity looks almost certain to end in humiliation.
This article appeared in the Business section of the print edition under the headline “Losing its bearings”
From the March 14th 2009 edition
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