Family-owned German engineering company Schaeffler is looking to takeover Continental, the world's fourth-largest tyre maker.
The Frankfurter Allgemeine Zeitung newspaper said today that the Schaeffler offer values Continental at over €10 billion and would include taking on the tyre maker's €11 billion debt.
The bid price gives Continental shareholders a 15% premium over the company's current share price and would be Europe's biggest M&A deal so far this year.
If the bid is successful, the paper said Schaeffler would likely delist Continental from the German stock exchange in a similar fashion to when it acquired German auto parts company FAG Kugelfischer in a hostile takeover in 2001.
Continental's share price has fallen around 50% since peaking last July. At close of trading on Friday, the company was worth €8.7 billion, based on a share price of €53.96.
Spokespeople for Schaeffler and Continental are not confirming or denying the report. "As a matter of principle, we do not comment on market rumours," said Schaeffler spokesperson Detlef Sieverdingbeck.
Schaeffler is one of the largest European industrial companies in family ownership. It makes a range of products including ball bearings, employs around 66,000 staff and has a turnover of almost €9 billion.
The company is owned by Maria-Elisabeth Schaeffler (pictured), wife of co-founder Dr Georg Schaeffler, who founded the company in 1946 with his brother Wilhelm.
Continental has around 152,000 staff, with revenues of €16.6 billion. The tyre maker acquired Siemens' auto electronics unit VDO late last year, which raises Continental's revenues to approximately €26.4 billion.