DETROIT – German auto supplier Continental AG announces it is acquiring the automotive electronics business of Motorola Inc. for $1 billion in cash.

The sale includes Motorola’s controls, sensor, interior electronics and telematics businesses. Those units will be integrated into Continental’s Automotive Systems Div., which specializes in active and passive safety devices such as electronic stability control and other body electronics.

Continental Chairman Manfred Wennemer emphasizes the acquisition is aimed strictly at growing the company’s business and product portfolio and says there are no synergies or redundancies that will result in layoffs or consolidation of any of the acquired businesses.

Wennemer acknowledges a few sales positions overlap but says there will be “hardly any” job reductions.

“Motorola’s automotive electronics business is a perfect fit with our strategy of providing sophisticated safety systems to our customers,” Wennemer says in a teleconference from Germany with reporters here at the Society of Automotive Engineers World Congress.

The acquisition will increase global sales by more than 20% but will immediately double Continental’s North American sales.

“This will really put us on the map,” says William Kozyra, president and CEO of Continental Automotive Systems North America.

Motorola’s automotive unit currently is part of its Networks & Enterprise business. It employs nearly 4,500 worldwide, 80% of which are based in North America. Major customers include General Motors Corp., Ford Motor Co., DaimlerChrysler AG, BMW AG and Cummins Inc.

    The business contains three major product lines:
  • Telematics (embedded wireless vehicle communications).
  • Powertrain and chassis control (steering, suspension, occupant detection electronics and stability control).
  • Body electronics (climate control and electronics for power doors, power seats, window lift and electric motors).

Continental officials are particularly enthusiastic about the telematics business the company is acquiring from Motorola, which they say will enhance Continental’s position as a leader in active and passive vehicle safety.

They view telematics not just as wireless voice and data communications but a series of complex technical functions, including car-to-car and car-to-infrastructure communications, remote vehicle maintenance, customer-relationship management and advanced safety functions.

“Our new telematics capabilities not only increase the functionality of active safety performance by helping to avoid collision, they also enhance the post crash safety and emergency assistance of occupants,” says Karl-Thomas Neumann, president of Continental Automotive Systems Div.

Ten years ago Continental set out to expand beyond its core tire business and acquired the brake and chassis system supplier Teves from ITT Automotive in 1998. It then bought the Temic automotive electronics company from DaimlerChrysler AG in 2001 and says it is on the lookout for further acquisitions.

dwinter@wardsauto.com