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# Barclays leads €2.4 billion debt package backing Lone Star's ContiTech acquisition from Continental
- URL: https://www.theglobalbanker.com/barclays-leads-eur2-4-billion-debt-package-backing-lone-stars-contitech-acquisition-from-continental/
- Published: 2026-09-09T14:44:39.000Z
- Updated: 2026-10-02T01:11:44.000Z
- Description: A lender group led by Barclays is preparing a €2.4 billion financing package, comprising a €1.9 billion term loan and a €500 million high-yield bond, to fund Lone Star Funds' purchase of ContiTech.
- Author: TGB Editorial Team
- Tags: M&A, Europe

A group of lenders led by Barclays Plc is preparing a €2.4 billion ($2.8 billion) financing package to support Lone Star Funds' acquisition of industrial products manufacturer ContiTech, according to people with knowledge of the matter cited by Bloomberg on Wednesday. The structure is expected to comprise a €1.9 billion term loan and a €500 million high-yield bond, the people said, requesting anonymity because the discussions remain private. The term loan is intended for distribution to investors in the leveraged loan market in both US dollars and euros, a dual-currency approach that widens the potential buyer base beyond European institutional accounts. The transaction could launch as soon as this month.

Continental AG signed a definitive agreement on 4 July 2026 to sell its ContiTech group sector — a plastics and rubber business — to an affiliate of Lone Star Funds at an agreed enterprise value of €4.0 billion, plus performance-based components of up to €250 million in subsequent years. The German manufacturer confirmed the signing in an ad-hoc disclosure following approval by both its Executive Board and Supervisory Board. Completion remains subject to regulatory approvals, in particular clearance from the relevant antitrust authorities, alongside other standard closing conditions, and could occur by the end of 2026.

#### A CARVE-OUT AT THE CENTRE OF CONTINENTAL'S RESHAPING

Materials presented by Continental at its second-quarter 2026 results, led by chief executive Christian Kötz and chief financial officer Roland Welzbacher, showed €4.4 billion of ContiTech sales in fiscal 2025 (excluding OESL), implying a price of roughly 0.9 times sales. The business employed roughly 22,000 people, generated an adjusted EBIT margin of 7.1 per cent, and carried approximately 80 per cent industrial exposure.

For the seller, the transaction completes a pivot toward a tire-focused pure play. Continental expects €3.1 billion in net cash proceeds, of which about €2.5 billion is earmarked for shareholder returns through a special dividend or a combination of a special dividend and share buybacks (under an authorisation of up to 10 per cent of share capital), with €0.6 billion directed to deleveraging. The company targets a reduction in its leverage ratio from 2.0 times to below 1.0 times by 2029\. Net indebtedness stood at €5.5 billion at the end of the second quarter, with a leverage ratio of 2.06 times, compared with 2.1 times a year earlier.

#### SYNDICATION INTO A CROWDED AUTUMN PIPELINE

Barclays and the other lenders will be selling the ContiTech paper into an unusually congested market. Bankers are preparing to offload in excess of $138 billion of buyout debt in the coming months, with the European pipeline approaching €40 billion ($46 billion) and the US pipeline at about $92 billion, according to JPMorgan Chase & Co. figures reported by Bloomberg on 8 September. Bloomberg reported that buyout debt supply was surging to levels not seen since before the financial crisis. Competing jumbo mandates include £5 billion ($6.8 billion) of debt backing EQT AB's acquisition of Intertek Group Plc.