Disclaimer :

The Competition DG makes the information provided by the notifying parties in section 1.2 of Form CO available to the public in order to increase transparency. This information has been prepared by the notifying parties under their sole responsibility, and its content in no way prejudges the view the Commission may take of the planned operation. Nor can the Commission be held responsible for any incorrect or misleading information contained therein.

SECTION 1.2

Description of the concentration

On 29 July 2008, Schaeffler KG ("Schaeffler") published an offer to acquire all

outstanding shares of Continental AG ("Continental") (the "Proposed Transaction").

The offer constitutes an unsolicited public cash tender offer. The Proposed

Transaction involves the acquisition of sole control by Schaeffler over Continental.

On 20 August 2008 the Parties entered into an Investment Agreement under which

Schaeffler and its owners guaranteed the continued existence of certain structures

and strategic business concepts of Continental and they also agreed not to increase

their share holdings in Continental above 49.99 % until 2012. Schaeffler offered to

pay EUR 75.00 per share.

Schaeffler is a private company active in the development, production and sale of all

kinds of bearings and other mechanical components for automotive, industrial and

aerospace applications. Schaeffler forms part of a wider group of companies.

Continental, a publicly listed company, has traditionally been a well-known

manufacturer of tires and other industrial rubber products. More recently it has also

become an automotive industry supplier with comprehensive expertise in electrical

and electronic products and systems such as brake systems, driving dynamics

control, electronics and sensors technology.

The strategic rationale behind the Proposed Transaction is that the combination of

the distinct but complementary product portfolios of Schaeffler and Continental will, in

the future, lead to better system capabilities for key areas in the automotive sector

and for important industries in the industrial sector. It will combine the Parties'

respective strengths in mechanical engineering and electronics.

It is Schaeffler's submission that the Proposed Transaction will have no material impact on

competition, but rather create a stronger competitor, which will provide improved products to

its customers.