Conti Gets Phoenix Go-Ahead

The EU Commission has given Continental the okay for its proposed takeover of Phoenix. “Therefore, there is nothing in the way of a merger of these two historic German companies anymore and we will find ourselves well positioned to deal with the worldwide competition,“ said Continental executive board chairman, Manfred Wennemer. “We are quite confident that by joining forces the employees at Phoenix and ContiTech will be able to successfully tackle this daunting challenge.“

During its deliberations the commission voiced its fair-competition reservations, arguing that the announced merger would have given the companies involved a dominant market position with respect to certain air springs and steel cord conveyor belts. In a concession designed to smooth over these reservations, Continental agreed to sell Phoenix’s Vibracoustic holding, a joint venture with Freudenberg & Co, along with Phoenix’s production of air spring original equipment for commercial vehicles. Continental has also agreed to dispose of a heavy conveyor belt production line.

According to the company the Continental board chairman appeared generally satisified with the position of the EU commission, commenting: “We expected certain strings to be attached, even if we consider them unwarranted in view of the competition in the OEM sector worldwide. Economically, implementation of what we have agreed to will have relatively little impact, allowing us, nonetheless, to realise the positive effects targeted. The takeover of Phoenix AG will, in any case, allow us to hold to our plan of further expanding the position of our ContiTech division as one of the world’s leading specialists in rubber and plastics technology. The calculated synergy effects can essentially be realized as well. The figures reported by Phoenix so far this year have been good, with the upward trend sure to become more pronounced in the future.“ Mr Wennemer also announced that payment of the Phoenix shares offered will be effected in early November.