A merger of indebted German auto parts supplier Continental AG (CONG.DE) and family-owned ball bearings maker Schaeffler is not on the cards this year, German newspaper Handelsblatt reported.

Deals

The financial daily cited a prospectus for Continental's planned rights issue of just over 1 billion euros ($1.43 billion), which said the two companies would not merge in the foreseeable future.

A source close to Continental told Handelsblatt the merger would not happen in the next 12 months.

A merger of Continental and majority shareholder Schaeffler was so complex the timing had to be flexible, an industry source told Handelsblatt.

Continental and Schaeffler declined to comment on the report.

On Wednesday, Continental said it would raise fresh equity in a rights issue to repair its sagging balance sheet.

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