EC agrees the acquisition of Continental AG by Schaeffler KG

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Continental AG, a German manufacturer of car components, by Schaeffler KG, also of Germany. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Schaeffler KG is a manufacturer of a great number of mainly mechanical products used in automotive, industrial and aerospace applications. Founded in 1946, the Schaeffler Group manufactures a vast array of bearings, from cylindrical roller bearings to needle roller bearings, used in the aerospace, automotive, machine tool, and semiconductor industries. Its three main brands are INA, FAG, and LuK, and though the entities are treated separately within the company, they also work collaboratively on specific product development.

Continental AG is one of the world's leading suppliers to the automotive industry with extensive know-how in tire and brake technology, vehicle dynamics control, as well as electronic and sensor systems. Continental currently employs around 150,000 people in 36 countries, at nearly 200  plants, R&D centers and test tracks. As a leading technology partner to the automotive industry, Continental develops and manufactures advanced components, modules and systems.

The parties' activities do not overlap but to a minor extent their activities are vertically related, as Schaeffler supplies needle roller bearings which are used in vehicle components produced by Continental.

However, the Commission's investigation found that the merged entity would not have the ability to discriminate against its competitors in this market, as there are credible alternative suppliers and needle roller bearings represent only a small cost factor.

The Commission also carefully examined the potential conglomerate issues and found that there would be no negative impact on effective competition resulting from the combination of Schaeffler and Continental in the supply of components for belt drive systems and transmission systems.