Continental swallows Elektrobit’s automotive branch

May 20, 2015 // By Christoph Hammerschmidt
Automotive supplier Continental has announced to take of the automotive activities of embedded software vendor Elektrobit (EB). With the move, Continental strengthens its standing in the increasingly software-intensive automotive systems market. The move increase the heat on competitor Bosch.

Through the transaction, Elektrobit Automotive GmbH, headquartered in Erlangen (Germany) as well as its subsidiaries in many European and Asian countries will become a part of Continental. EB’s automotive business offers a range of software products and R&D services for in-car embedded software as well as tools that support the whole process of in-car software development. Customers are car manufacturers, automotive electronics suppliers and other suppliers to the automotive industry. The transaction which is subject to approval by antitrust authorities and EB shareholders, also includes EB’s 51-percent ownership in GmbH, a joint venture with Audi. The purchasing price will be 600 million euros in cash.

With the move, the concentration process in the European automotive supplier market is entering the next phase. Nine months ago transmission system vendor ZF Friedrichshafen announced the takeover of TRW; in this context Bosch bought ZF’s shares in the joint venture ZF Lenksysteme. More recently, chipmaker NXP had announced its intention to acquire fellow semiconductor company Freescale; both companies have strong activities in the automotive industry. The EB Automotive takeover can be regarded as a hint that software expertise is increasingly in demand in the automotive markets.

The news about the acquisition reached Continental competitor Bosch during a press event where Bosch introduced its strategy for driver assistant systems, connected car and electromobility. Rolf Bulander, Chariman of Bosch Mobility Solutions, commented the move from his perspective. “In the future, we will have to think much more flexible about collaborations, from project-focused cooperations to joint ventures.” He also acknowledged the rising significance of software for the automotive industry. “Software will carry the decisive benefit in the market. Of course, we also round off our set of capabilities”.

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