EU opens in-depth probe into auto battery takeover
BRUSSELS, Dec 4 (Reuters) – The European Commission opened an in-depth probe on Monday into the proposed takeover of the auto battery business of Italy’s FIAMM group by VB Autobatterie, saying the deal would cut the number of industry players to two.
VB is a joint venture of Johnson Controls Inc. of the United States and Robert Bosch GmbH of Germany.
Competition Commissioner Neelie Kroes said,
When the largest producer of automotive starter batteries in the EEA (European Economic Area) wants to acquire the third-largest manufacturer in an already highly concentrated market, the Commission must ensure that this would not adversely affect consumers,
The Commission, the executive arm of the European Union, said by cutting the number of major auto battery suppliers in the 28-country EEA to two from three, the deal would likely reduce competition.
The investigation will last 90 working days, it said.
The Commission said,
Apart from the remaining competitor Exide, only a few smaller manufacturers of automotive starter batteries with a very limited production capacity are active in that market,
The Commission said the small group of manufacturers made batteries for passenger cars, trucks and commercial vehicles. The batteries are also used by repair services, wholesalers for auto parts, and supermarkets.
Johnson Controls said when the deal was announced that the battery business being acquired had annual revenues of about 190 million euros ($253 million).
The deal included Fiamm’s battery operations in Avezzano and Veronella, Italy, along with sales and warehouse operations across eastern and western Europe.
It said Fiamm’s Mlada Boleslav Czech plant was not included in the transaction.
The company said in October,
The acquisition enables Johnson Controls to expand its aftermarket presence throughout Europe, including the fast-growing eastern European countries,
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EU opens in-depth probe into auto battery takeover, source
