Crain News Service and wire reports
FRANKFURT, Germany (May 29, 2014) — Germany's cartel office says it has launched an in-depth assessment of German supplier Continental A.G.'s planned takeover of U.S. rubber firm Veyance Technologies.
The probe is expected to run until at least Aug. 25 and will evaluate the potential market impact of the deal, a spokesman for the cartel office said.
In February, Continental said it had agreed to buy Veyance for 1.4 billion euros ($1.92 billion) as a way to help diversify its business.
At the time, the supplier said it expected the purchase to significantly boost profit at its ContiTech unit. Veyance Technologies, based in Ohio, makes industrial hoses and conveyor belts.
Continental, Europe's No. 2 auto parts supplier and also the region's second-largest tire maker, is targeting a fifth consecutive year of record sales in 2014 after deliveries of parking-assistance systems and braking electronics helped lift sales last year.
The ContiTech unit, which makes hoses, conveyor belts and artificial leather, employs 29,700 people and generated about 3.9 billion euros in sales last year, or about 12 percent of the group's revenue.
Combined with Veyance, the Continental unit would have sales of about 5.4 billion euros and employ 39,000 people globally.
Reuters and Bloomberg contributed to this report, which appeared in Automotive News Europe, a sister publication of Tire Business.