But family-owned Schaeffler had to raise its offer to €75 ($111.15) per share from €70.12 previously and has had to pledge not to own more than 49.99 percent in Continental for four years, a statement said.
The new offer values Continental at more than €12 billion, nearly 40 percent more than the value before Schaeffler announced an original bid in July.
Conti said at the time that Schaeffler's offer was "highly opportunistic, does not come close to the true value of Continental, does not create trust and lacks a convincing strategic rationale." But after weeks of talks the two firms said Thursday they have struck a deal, creating a firm with yearly sales of €35 billion and 215,000 employees.
"Following the hard work over the last weeks, Continental has come to an acceptable overall concept," it said. "For its costumers, Continental remains a reliable long-term partner that is extremely well positioned. The Continental employees can continue to rely on the clear focus of our concept for the future which we have developed over
the last years."
It was not all amicable, however. Continental's chief executive since 2001 Manfred Wennemer, who fiercely opposed Schaeffler's takeover, has "asked ... to be relieved of his responsibilities" from the end of the month, Conti said.