December 11, 2014 — OTTAWA, ON — Competition Bureau
The Competition Bureau today issued a No Action Letter (NAL) with respect to Continental AG’s (Continental) proposed acquisition of Veyance Technologies, Inc. (Veyance) given the parties' settlement agreement with the United States Department of Justice (U.S. DOJ). The implementation of this settlement agreement will adequately resolve the Bureau’s concerns related to the manufacture of air springs for commercial vehicles.
The Bureau concluded that the transaction 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 for the manufacture of air springs for commercial vehicles.
Continental and Veyance are rubber and plastics technology companies that manufacture products for industrial and automotive applications. 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 Bureau's review focused on overlaps in the production of conveyor belts, automotive hose for passenger vehicles and air springs for commercial vehicles.
The U.S. settlement agreement requires the parties to sell all of Veyance's operations for the development, manufacture and sale of air springs in North America. The Bureau is satisfied that the implementation of the settlement agreement will adequately resolve competition concerns in Canada.
With respect to production of conveyor belts and automotive hose for passenger vehicles, the Bureau concluded that this transaction is unlikely to result in a substantial lessening or prevention of competition due to, among other things, the presence of effective remaining competitors.
A NAL confirms that the Bureau has reviewed the proposed transaction and concluded that it will not, at this time, challenge that proposed transaction before the Competition Tribunal under the merger provisions of the Competition Act.
- Continental currently has more than 177,000 employees in 46 countries.
- Veyance operates 28 production facilities in 11 countries, including 2 in Canada: a conveyor belt manufacturing facility located in Bowmanville, Ontario, and an industrial hose manufacturing facility located in Saint-Alphonse-de-Granby, Quebec.
- While neither Veyance nor Continental manufacture air springs in Canada, they do sell them in Canada.
- As part of our normal approach in examining a merger, the Bureau consults with a wide range of industry participants, such as suppliers, competitors, industry associations, customers and industry experts.
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