Continental AG will spin off its powertrain division Vitesco Technologies to shareholders.
Initially, the company had planned a partial sale and a subsequent listing of the business.
The decision to rather spin off the division as a whole should be understood as a sign that challenging times are ahead.
Investors should not forget that both Continental and Vitesco will still be facing similar risks.
Nonetheless, I believe that the spin-off is beneficial for shareholders as it provides them with more flexibility.