Board proposes to split the Rieter Group and separate the Rieter Textile Systems and Rieter Automotive Systems divisions.
At the 2011 Annual General Meeting on April 13, 2011 the Board of Directors of Rieter Holding AG proposes the separation of Rieter’s Textile Systems and Automotive Systems division into two distinct listed companies with independent ownership and management.
Subject to the approval by the Annual General Meeting on 13 April, 2011, Rieter Holding will change its corporate purpose and distribute the shares of the entity holding the business of its Automotive Systems division to its shareholders in the form of a special dividend. The name of the new company will be Autoneum Holding AG.
The new company Autoneum will be listed on the SIX Swiss Exchange as of mid-May 2011. Hans-Peter Schwald is expected to be nominated as Chairman of the Board, Martin Hirzel as CEO, Urs Leinhäuser as CFO and Deputy CEO.
The current Rieter Textile Systems Division will continue to trade as an independent company under the name of Rieter (symbol RIEN).
The proposed transaction is not expected to result in job losses.
The two Board Members and largest shareholders of Rieter Holding, Peter Spuhler and Michael Pieper, support the transaction. In connection with the separation, these two shareholders have agreed to grant to Autoneum a subordinated loan of 12.5 million CHF each and not sell their Autoneum shares for a certain agreed time period (lock-up). They have also agreed to serve on the Board of Directors of Autoneum at least until the 2014 Annual General Meeting.
The Board of Directors of Rieter Holding AG plans to separate its two industrial activities, the textile machinery and automotive component supply businesses.. The intent is to fully separate the two divisions, both legally and financially, to enable them to operate with greater strategic flexibility and position themselves more clearly in their respective markets. The Board of Directors will propose to the Annual General Meeting on April 13, 2011, to separate the automotive component supply business from Rieter Holding AG and list it as an independent entity on the SIX Swiss Exchange.
Rieter acquired its automotive component supply business in the mid-1980s, thereby creating a counterweight to its established but cyclical business in the textile machinery sector. Rieter’s Automotive Systems division developed steadily for many years against the backdrop of the previously prevailing constant growth rates in the automotive component supply business. Innovations and numerous acquisitions also contributed to its growth.
Rieter’s Textile Systems division has also developed satisfactorily and nowadays successfully counteracts the demand cycles typical of its sector with flexible structures. Rieter has coped successfully with the market-related slump in 2008 and 2009 by systematically implementing restructuring and cost-cutting programs, and achieved the turnaround in the past financial year.
Following the successful, joint development under one roof for decades, both divisions are now globally structured, individually sustainable and ready to be positioned as strong and focused standalone entities on the capital markets.
The proposed separation is also a consequence of Rieter’s long-running development goal to establish the financial independence of both businesses. Already today both divisions are operated as separate businesses with their own management teams and organizations. ”The proposed separation and making the divisions formally independent,” comments Rieter’s Executive Chairman Erwin Stoller, “is a logical next step that we are now taking.” The divisions would therefore be better equipped to face the structural changes in the textile and automotive industries as well as the increasing complexity and globalization of both businesses, which will continue in future. The proposed separation is not expected to result in any job losses.
Well placed to be launched as independent companies
Rieter’s Board of Directors expects considerable benefits for both activities if they operate as independent, listed companies in the future. One important result will be the higher strategic and operational flexibility of each entity. This will enable both companies to capitalize on further development potential and growth opportunities, e.g. through partnerships or cooperations. The proposed separation offers interesting prospects to Rieter’s shareholders. By separating the group into two pure-play listed entities, shareholders will benefit from increased transparency and visibility.
Rieter’s textile machinery and automotive component supply businesses are currently well placed in industrial and financial terms to operate successfully as independent companies in their markets and expand their activities.
Two attractive, publicly listed companies
Rieter and Autoneum provide investors with an investment choice for two attractive, clearly focused, publicly listed companies. Rieter Holding Ltd. provides more detailed information on the planned separation in its invitation to the Annual General Meeting published today and a separate Shareholder Information Brochure sent out to the shareholders with the invitation. The relevant documents can also be accessed online at www.rieter.com.
Autoneum: One of the Global Technology Leaders in Acoustic and Thermal Management Solutions for Motor Vehicles
Autoneum provides innovative and cost effective solutions for noise reduction and heat management to increase vehicle comfort and value. Autoneum has a broad portfolio of products, which it has categorized into six product lines: interior floor, underbody, engine bay, body treatment, interior trim and trunk. Autoneum supplies its products to major automotive original equipment manufacturers around the world and is structured into four regional segments: Business Group Europe, Business Group North America (United States, Canada and Mexico), Business Group Asia, and Business Group SAMEA (South America, Middle East and Africa). All its business groups pr