Competition Bureau statement regarding the acquisition by Continental of Veyance

Position statement

OTTAWA, December 11, 2014 — This statement summarizes the approach taken by the Competition Bureau in its review of the proposed acquisition by Continental AG (Continental) of Veyance Technologies, Inc. (Veyance), pursuant to an Agreement and Plan of Merger announced on February 10, 2014.

On December 11, 2014, the Bureau issued a No Action Letter (NAL) stating that, given the implementation of the settlement agreement between the United States Department of Justice (U.S. DOJ) and the parties, the Commissioner of Competition does not, at this time, intend to make an application under section 92 of the Competition Act (Act) to challenge the proposed acquisition. Section 97 of the Act provides for a one-year period following the completion of the transaction during which the Commissioner may challenge the transaction before the Competition Tribunal.

In conducting its review, the Bureau cooperated and worked very closely with the U.S. DOJ. The Bureau’s long standing relationship with the U.S. DOJ ensured an efficient and coordinated review of the transaction, consistent with the agencies’ agreement on Best Practices on Cooperation in Cross-Border Merger Investigations. In addition, the Bureau interviewed a large number of market participants, including customers and competitors to the parties, and reviewed documents and data from the parties.Footnote 1

Background and analysis

Continental and Veyance are rubber and plastics technology companies that manufacture products for industrial and automotive applications. The Bureau’s review focused on overlaps in the production of conveyor belts, automotive hose for passenger vehicles and air springs for commercial vehicles.

Due to the presence of effective remaining competitors, the Bureau determined that the proposed transaction is not likely to result in a substantial lessening or prevention of competition with respect to conveyor belts in Canada.

With respect to automotive hose, the Bureau focused its review on air conditioning hose assemblies for passenger vehicle HVAC systems. Veyance is an upstream manufacturer of bulk rubber hose, whereas Continental incorporates bulk hose alongside other components to produce hose assemblies downstream. Continental used to have an exclusive supply arrangement with a competitor to Veyance upstream, but it was recently terminated. Therefore, due to the presence of effective remaining competitors both upstream and downstream, the Bureau determined that the proposed transaction is not likely to result in a substantial lessening or prevention of competition with respect to automotive hose in Canada.

However, the Bureau determined that the overlap in air springs for commercial vehicles would have resulted in a substantial lessening of competition in Canada due to an insufficient number of effective remaining competitors and high barriers to entry.


Given that Continental and Veyance primarily supply Canada from manufacturing and final assembly plants located in the USA and Mexico, the Bureau benefitted from coordinating its review with the U.S. DOJ and the Mexican Federal Competition Commission. The parties have entered into a settlement agreement with the U.S. DOJ, the terms of which require the parties to sell Veyance’s North American Air Springs Business, which encompasses all operations for the development, manufacture and sale of air springs in North America.

The Bureau, where appropriate, will take into consideration and rely on remedies agreed upon in other jurisdictions, provided that such remedies fully address the Bureau’s concerns. The Bureau is satisfied that the implementation of the U.S. settlement agreement will adequately resolve competition concerns in Canada.

The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

This publication is not a legal document. The Bureau’s findings, as reflected in this Position Statement, are not findings of fact or law that have been tested before a tribunal or court. Further, the contents of this Position Statement do not indicate findings of unlawful conduct by any party.

However, in an effort to further enhance its communication and transparency with stakeholders, the Bureau may publicly communicate the results of certain investigations, inquiries and merger reviews by way of a Position Statement. In the case of a merger review, Position Statements briefly describe the Bureau's analysis of a particular proposed transaction and summarize its main findings. The Bureau also publishes Position Statements summarizing the results of certain investigations, inquiries and reviews conducted under the Competition Act. Readers should exercise caution in interpreting the Bureau’s assessment. Enforcement decisions are made on a case‑by‑case basis and the conclusions discussed in the Position Statement are specific to the present matter and are not binding on the Commissioner of Competition.

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