Bundeskartellamt clears acquisition of Veyance by Continental

12.09.2014

In second phase proceedings the Bundeskartellamt has cleared the acquisition of Veyance Technologies, Inc., Fairlawn, Ohio/USA, by Continental AG. Both companies are component suppliers to the automotive industry.

The merger project primarily affected the EEA-wide market for air springs for heavy-duty utility vehicles. These are sold to manufacturers of trucks, trailers and axles. In spite of Continental's high market shares and the reduction of the number of major suppliers in this market from four to three, the Bundeskartellamt found that the merger posed no significant competition problems.

Andreas Mundt, President of the Bundeskartellamt: "High market shares alone do not pose a problem to competition. A careful analysis of the market conditions in Europe has shown that the effects of the project on competition do not justify a prohibition decision."

Apart from the parties to the merger two other major companies are active on the market for for the supply of air springs for heavy-duty utility vehicles, Vibracoustic CV Airsprings GmbH, Hamburg, and the American company Firestone, which belongs to the Japanese Bridgestone Group. According to the Bundeskartellamt's investigations Veyance, which is the smallest of the four major suppliers, only plays a minor role in this market. Over the past years Veyance has concentrated on supplying its existing customers. It has been unable to win new clients. An analysis of the customers' purchasing procedures also showed that the parties to the merger seldom compete with one another in calls for tender issued by motor vehicle manufacturers. Continental's closest competitors are in fact Vibracoustic and Firestone rather than Veyance. Competitive pressure is also exerted by smaller suppliers. Several new Turkish suppliers are entering the market which up to now were only active on the spare parts market but which have since been able to conclude first contracts with European customers.

The Bundeskartellamt has also examined the markets for the supply of hoses/hose assemblies for the automotive industry as Veyance holds a strong position in the market for the supply of certain types of hose. It was found that the project did not raise any significant concerns in these markets either. The same applies to the markets for automotive drive belts, industrial drive belts and conveyor belts.
The merger project is currently being examined worldwide by a number of other competition authorities. Logo: Offene Märkte | Fairer Wettbewerb

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